How To Get Health Insurance For Your Small Business

Price is most likely going to be the most important factor for you when determining which business insurance plan and provider you choose. When determining your budget, ask yourself:

• How much money should I allot to health care?
• How much will I contribute per employee?

The perfect plan for you is going to offer good coverage for your employees and still remain within your ideal budget.

Make sure you know what you are willing to pay, and keep the contributions that may be required from your employees in mind, as well.

What benefits are non-negotiable for you? Start looking at plans that fit in your price range and make sure they include those benefits.

More questions to help guide you in choosing the perfect plan and level of coverage include:

• How many employees do I need coverage for?
• How old are all my employees? How many of them are smokers?
• Am I going to add ancillary options to the insurance plan? (Vision or dental? What are you willing to pay for prescription drugs? Do you want to offer a wellness program?)
• How much of my employee’s premiums am I going to pay? (For tax credits, you will need to cover at least 50% of the premium coverage.)
• Will I also offer insurance to dependents and part-time employees?
• Am I going to have a waiting period before employees are eligible to collect insurance?

Once you have these questions answered, you’ll have a much better idea of exactly what kind of plan you need. Take these steps to make sure you’re prepared for your first meeting with an insurance agent or broker so you’re ahead of the game. This is key to avoiding overpaying and underproviding.

Once you know what you’re looking for, it’s time to do some administrative work.

In order to get an accurate quote, you have to provide an insurance agent or broker with accurate numbers and documents. Gather the following documents before starting the process:

• Business address
• Business name
• Tax ID
• The number of employees to be insured
• Employee information including age, zip code, number of dependents, and marital status
• Information about employee tobacco use

There are a number of ways to shop for health insurance for your small business, including:

• Small Business Health Options Program (SHOP): If you have less than 50 employees, you could be eligible to enroll in SHOP. Visit the SHOP website to determine your eligibility. You will then have the option to sign-up directly through the insurance platforms offered in your state or work with a SHOP broker.
• Online Insurance Carriers: You can contact online insurers directly to get a quote for your business. A quick Google search will lead you to many different providers including Kaiser Permanente, UnitedHealthcare, JustWorks (the platform for Aetna and Metlife), Humana, and more.
• Purchase Alliances: A purchase alliance is a private version of the government’s SHOP option. Purchase alliances allow you to pick a private health exchange. You agree to pay a specific amount for coverage per employee, and your employees will choose a plan offered by the purchasing alliance. You are not eligible to receive a tax credit with this option. However, these plans can be more competitively priced, and if your employees are paying for their medical care from pre-tax earnings, it can still be a cost-effective program for all parties.
• Professional Employer Organization (PEO): A PEO is an outsourced human resource department that takes on tasks including payroll and offering small business health insurance plans. In addition to finding competitively-priced options, a PEO can also handle employee enrollment and claims processing.
• Insurance Brokers: If you want to completely take the guesswork out of the equation and pay a professional, consider hiring an insurance broker. These brokers act as the go-between for your business and an insurance company. They negotiate the sale of the insurance and work for you to find the best health insurance pricing.

Whether you pass along your information to a broker or head to the SHOP site or online carriers, now you’re ready to actually start making purchasing decisions. If you’ve chosen to pass off the rest of this responsibility to a PEO or insurance broker, you’re set. Otherwise, you need to keep the following in mind when evaluating providers:

• The financial strength of the provider
• Customer service ratings for the provider
• Claims service ratings
• Plan pricing
• Policy offerings and coverage benefits
• Provider network

Like most things in life, cheaper is not always better. The least expensive plan is typically not going to have the coverage your employees need.

Compare the numbers and look at all of your options to figure out what you can afford and how the plans will impact your employees. Ask questions, push for numbers, and run scenarios with the experts. Research and make an educated decision that is best for your business and your employees.

You can purchase health insurance for your small business through SHOP, directly from an insurance provider, purchase alliances, PEOs, or insurance brokers.

If your business has over 50 full-time employees, you are legally required to offer health insurance in most states.

You should give your employees health insurance even if you aren’t legally required to do so. There are many pros including overall employee satisfaction, remaining a competitive employer, and tax deductions.