If your small business has fewer than 50 employees, you are not mandated to offer options for health insurance and medical plans. However, providing these benefits is the right thing to do, and there are clear, easy, and affordable options for finding the best small group health insurance for your business.
Benefits for Small Businesses That Offer Small Group Health Insurance
The perceived value of small group health and medical plans is high, for you and your employees. Here are just some of the benefits your small business will realize when you offer small group health insurance:
- Insured employees are loyal employees. Good benefits are one of the reasons employees join or stay with a company, especially in this time of slow job growth and healthcare reform. You can attract and keep conscientious and focused employees by offering excellent healthcare options that give them peace of mind.
- Gain tax advantages. Employers with 50 or fewer employees can deduct 100 percent of their employees' health insurance costs as a business expense. If your small business is very small – fewer than 25 employees – you may be able to receive a tax credit.
- Healthy employees are productive employees. When employees have good health insurance, they use it, and their families use it. The quality of life of your employees can improve with health insurance that makes preventive care possible. This means better concentration on the job, less worry about the price of doctor visits, and fewer sick days.
Small Group Health Insurance Options
Working directly with a third-party small group health insurance liaison will clarify what your small business qualifies for in terms of healthcare plans, and what you can offer to your employees. What's great about being a small business is that there are many possible avenues to take to provide these benefits.
Small group health insurance options include:
- Individual health insurance. Often considered the most cost-effective solution, employees can purchase individual health insurance coverage, regardless of carrier or policy. As the employer, you can opt to contribute any amount (up to federally defined limits) to the employee's premium through a health reimbursement arrangement (HRA). For small businesses that are ineligible or priced out of group health insurance, individual health insurance is often the ideal solution. This setup also works well for companies that are offering benefits for the first time or don't have the administrative help to manage a group health insurance plan.
- Individual health insurance with QSEHRA. The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) – sometimes referred to as a Small Business HRA – still allows employees to choose their own policy rather than only having the option of enrolling in the one-size-fits-all employer plan. In this situation, employers can set a monthly allowance, which means costs are fixed and there are no surprise rate increases.
- SHOP Marketplace. Public exchanges that are run by state or federally sell small group health insurance policies via the SHOP Marketplace. Employer requirements for participation can vary by state, but often address the amount a small business must contribute to the premium amount and how many employees must be enrolled. Employees still get to choose the insurance plan they want, business expenses always remain the same no matter what plan is chosen, and tax credits may be possible.
- Co-operative. Traditionally, small groups have chosen to join a co-op for health insurance. Being part of a co-op increases the buying power of the group, plus risk is spread out over the larger group rather than being relegated to your small business alone. Choosing the right co-op is important, because all of them have different structures and some may not offer better rates than a small group could get on the open market or through the SHOP Marketplace.
- Private health exchange. With this plan, employees are given a set contribution that they can use toward a menu of plan options, which can include individual or group-based options. This arrangement is similar to the SHOP Marketplace, but is done privately. While there are no tax credits to be had with a private health exchange, the plans can be priced more competitively and even of a higher quality with money-saving options.
- Private small group plan. Small businesses can still choose a private small group plan. The private market offers more options and carriers to choose from, particularly when paired with the SHOP options which may have limited plans depending on the state in which you're located.
Competitive Small Group Health Insurance for Small Businesses
Group health insurance can be costly for a small business and challenging in terms of management, which is why many companies choose not to offer healthcare plans at all. But offering something is better than offering nothing, especially when it comes to providing your employees with the comfort of knowing that their health and the health of their family is covered should they need it.
What employees of small businesses appreciate are choices. Allow The Benefits Group to help you identify competitive plans and the best options for your team with our creative solutions for group health insurance. Contact us today to speak with one of our benefits consultants.
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