While starting your own company is a massive undertaking in and of itself, finding the best small business health insurance can be one of the most challenging components of running a small business. With so many options to choose from, questions left unanswered, and likely just you, instead of an entire human resources department, it’s understandable to be a little overwhelmed when it comes to small business health insurance.
Continue reading to learn more about the importance of small business health insurance, how it works, the types of health insurance available to small businesses, and more.
As a small business owner, there are four key factors that you must understand regarding small business health insurance: number of employees, coverage, employee premiums, and finding the ideal small group health insurance coverage.
According to the Affordable Care Act (ACA), small businesses that have less than 50 employees are not legally obligated to provide health insurance to their employees. On the other hand, this means that businesses that have 50 or more employees are legally obligated to offer affordable group health insurance to said employees.
For the insurance to be deemed “affordable,” the employee’s yearly cost cannot be more than 9.78% of their yearly income. If you do not offer health insurance to your employees, you are subject to a penalty of $2,320 for every full-time employee after the first 30.
Undeniably, starting up your own business can be pretty expensive. For this reason, it’s common for small business owners to shelve the idea of offering health insurance simply to stay on budget. Though, health insurance is crucial to the success of your business, as helps with attracting and retaining quality employees.
The following are just a couple reasons why, even if you’re not legally required, we highly advise offering small business health insurance to your team:
Individual health plans only give coverage to you and your dependents, while group coverage is purchased by a business and then offered to eligible employees and their immediate family members. As the name suggests, group health insurance provides coverage to members of a group – whether it’s members of an organization or employees of a company.
Since the insurer’s risk is spread across the entire group of insured members, group insurance is typically more affordable and also provides more extensive coverage.
By purchasing group health insurance for you and your team of employees, you may qualify for a number of tax credits. However, you must buy the plan through the Small Business Health Options Program Exchange, an insurance exchange developed by the Affordable Care Act, and meet these requirements:
If you, as a small business owner, meet these requirements, you may be eligible to receive up to 50% of your contributions toward employee premiums as a tax credit. This can greatly decrease the overall cost of providing health insurance to your team.
It has been proven that offering health insurance as a part of your employee benefits package is an excellent way to attract and retain top talent. It shows that you value your employees and many people prefer to have access to health insurance over a higher salary.
After all, a healthy team is a productive team. By providing comprehensive health coverage, you will increase employee productivity and morale. Employees that lack proper health insurance are less likely to get routine checkups or go to the doctor when they get sick. This can result in them getting even sicker and having to take time off of work.
Additionally, if you are a self-employed small business owner, having health insurance is absolutely critical. It protects yourself, your business, and your dependents in the event of an unexpected devastating illness.
When it comes to small business health insurance, you have four main options to choose from: HMO plans, PPO plans, HSA-qualified plans, and indemnity plans.
Since there is such a wide variety of small business health insurance options to choose from and every business is unique, costs can vary considerably. Though, according to a report done by the Kaiser Family Foundation in 2020, the average annual premium for small businesses was $7,483 per full-time employee. Employers contributed about 84% of this premium, with employees left to fund the remaining 16%.
At Taylor Benefits Insurance Agency, we have been helping small businesses like yours for more thirty years. Regardless of the size of your business, we can help you find the right health insurance plan that fits the needs of your company and your workforce.
We’ll assist you with all the paperwork, ensure that your business complies with pertinent laws, help you with implementation, and even provide assistance when it comes time to renew. Best of all, we focus on tailoring plans to the unique needs and budget of each company we work with.
So, what are you waiting for? Don’t hesitate – contact us now to get started!
We’re ready to help! Call today: 800-903-6066