- Providing world class service and value for employee benefit group plans since 1987
Group health insurance plans, even small ones, can be very affordable for employees to pay into. Costs for employees can start around $270 per month, or $3240 per year, which is more than three times less than the cost the average American pays into their healthcare annually.
The plan you choose from the private insurance company will dictate your rates, premiums, and health care coverage. Sometimes, people assume that their healthcare coverage will diminish by choosing a small group health insurance.
However, this is not automatically the case. While healthcare insurance plans offered by private insurance providers, or on the state and federal exchanges, are not very customizable, plans from independent insurance agencies like Taylor Benefits Insurance are.
With an independent agency, you can receive the health care coverage you need at an attractive price. Health insurance companies need to offer health insurance plans at affordable monthly premiums in order to remain in medical insurance business. These health insurance providers are in competition with each other, while independent agencies are not.
With an independent agency, you can shop health insurance that covers pre existing conditions and save money by avoiding high insurance premium costs as much as possible. It provides essential health benefits like dental coverage, out of network care, family coverage, etc.
The size of the health plans does not matter as much as the agency offering the plan.
Insurance is a numbers game, no matter which type of health plan you choose from the insurance company. Fortunately for those interested in a small business health insurance plan, premiums are showing a downward trend in the last few years. This is due to Affordable Care Act (ACA) passed by the president Barack Obama in 2010.
According to 2018 research, the average premium per person fell to $409 in 2018 for small business health insurance coverage plans. This is a drop from $416 in 2017; while it might not sound like a huge improvement, it speaks to health trends that small businesses can certainly get behind.
It’s worth noting that the group health coverage premiums have risen by about 5% since 2015, but this is to be expected when accounting for inflation.
Small business health insurance is still likely to cost both employer and employee a couple hundred dollars in health plan premiums (assuming that the cost is being shared), but this is a significant improvement over some of the alternatives, both in terms of premiums and deductibles.
Moreover, the deductible for small group insurance averages about $3,000, which is much lower than that for individual health plans.
When it comes to small business health insurance, there are essentially five different options that can be explored by small business owners.
The first and most traditional option is a simple group health insurance plan for small employers. This option is appealing to those who don’t want to wade through the confusing world of business health insurance plans, as it’s doubtlessly the easiest choice.
Employers pay a fixed health plan premium, part of which may be paid by the employee, and in return offer health benefits to their employees and possibly their employees’ dependents. It’s a straightforward option for a small business owner, but premiums to provide health insurance can be quite high for small businesses.
A newer option for small group health insurance gaining popularity is something called the qualified small employer health reimbursement arrangement (QSEHRA). Though it’s a mouthful, the health plan concept is relatively simple thanks to the legislation passed in 2016.
Basically, employers can offer a certain amount of money (of their choosing) in benefits to employees each month. Covered employees can purchase health insurance premiums, pay toward deductibles, and fill prescriptions within this amount and provide receipts to receive reimbursement. This option is wholly customizable to each employee, but adds some extra administrative burden all the way around.
Similarly, another option is to invest in something called a group coverage health reimbursement arrangement. This means that an employer would offer group health insurance, but they would also offer a certain monthly allowance to go toward copays, deductibles, and the like.
As with any reimbursement program, employees would need to submit proof of their expenditures, and there are stipulations for what is eligible for reimbursement.
The riskiest option for small business health insurance is for a business to provide self funded plans. This means that rather than paying premiums each month, employees submit their medical bills/prescription drugs and employers reimburse them directly.
This health plan option is an obvious gamble for small businesses, and although it sometimes plays to employers’ favors, it also has the potential to put them out of business.
Finally, associate health plans (AHPs) are a somewhat precarious option in which small businesses can invest. They are precarious due to the fact that a judge ruled against allowing them in 2019, though this is likely to be appealed. Basically, AHPs are when a number of smaller businesses within an industry or region band together to purchase larger group health plan policy from the insurance company.
Some small business owners are under the misconception that there is a certain threshold in terms of employee numbers that they must meet in order to be eligible for small group health insurance. While this isn’t strictly untrue, the threshold is incredibly low: at least one employee.
There is, however, a more strict upper limit by which employers must abide. The maximum number of employees that can still be considered a small group for medicaid services maxes out at 50. This means that businesses with more than 50 employees must explore large group health plans by the insurance companies and check their eligibility for such plans.
It’s important to note that in order to be eligible for small group coverage options, the one employee that is required must meet a number of criteria.
Namely, that employee cannot be small business owners themselves, and they cannot be the spouse, family member, or partner of the owner.
The employee must also be full-time employees, and not seasonal workers. This can pose some difficulties for family businesses but should be considered before investing in health insurance for small businesses.
Cost is always a huge factor when employers are considering different health insurance plans, but there’s more than meets the eye when it comes to comparing health insurance for small group and individual health plan.
If you only look at the premiums for each type of insurance, there’s not that much of a difference. On average, a small group plan’s premium will work out to an average of $409 per person by the insurance company; an individual plan premium is an average of $440 by the insurance company.
Looking a little closer, you’ll notice that the deductible for small business coverage is more than $1,000 less than that for individual coverage, but there’s even more to unpack than that.
Because employers contribute to the cost of premiums fixed by the health insurance company, the employee premiums amount for insurance is significantly lower with a small group health insurance plan than an individual one.
This makes a small group plan an obvious choice for employers looking to offer their valuable employees a competitive benefits package at the minimum contribution.
There are many reasons that employers ought to invest in group health insurance options, but not all of them are immediately evident. Make sure you thoroughly consider all of the ways that a group plan could positively impact your business before making your decision.
First and foremost, group plans save both businesses and employees money from payroll taxes. This is possible due to the fact that a larger risk pool translates to lower premiums from the best health insurance providers.
Additionally, covering more people under a single plan helps drive down costs so that employers can afford to purchase better insurance from the insurance broker. This means that group plans are basically a no-brainer for employers.
A small group plan offers a host of benefits to employees. Because the plan is offered through the employer, employees pay a portion of the premium cost generally to offset a comprehensive health coverage for each employee. Additionally, employees are able to enjoy a higher quality insurance plan than they would be able to afford on their own.
All of this creates a brighter company culture and more positive work environment. When employees feel valued and their medical expenses taken care of, the quality of their work inevitably improves. Plus, employees are less likely to jump ship when they feel that they’re receiving a quality benefits package for the medicaid services.
Finally, tax incentives and tax free money are another way in which businesses benefit from offering group health insurance plans. This only further solidifies the assertion that group health plans are a smart financial move for both businesses and their employees.
Small businesses should consult their tax advisor to avoid any tax penalty for not providing a health insurance to keep the employees healthy when they need it.
The following are popular forms of health insurance coverage that you may decide you want included in your plan by the insurance company. The specifics of your plan and how much coverage is required, however, will depend on your employees health trends and goals.
The benefits you can include in your group health plan are endless.
The rights and protections you will receive are determined by both the federal and state government you reside under. For federal rights and protections, you can go here for more information. For your rights and protections under state law, you should go to the websites specific to your state.
The state website to go to if you live in New York, for example, is the Department of Health’s website. There, you will find the rights and protections that apply to you.
A great many things are determined under the state law, which determine policies that pertain to your health care, like:
Look to independent insurance agencies like Taylor Benefits Insurance first. Independent agencies can help you get affordable health insurance that covers preexisting conditions, lowers your healthcare costs, covers catastrophic care, and more.
A plan from an independent agency will be better than a plan provided by the federal government or an established health care insurance company.
Contact Taylor Benefits Insurance today with no cost for registration and no expectation of enrollments. Get personalized recommendation as per your needs.
Require additional information? Call us today at 800-903-6066.
Todd Taylor with Taylor Benefits gives our small business the kind of personal service we need. Insurance benefits are important to our employees and Todd helps us find a balance between benefits and value. Todd responds immediately to my phone calls & e-mails. He has even gotten in touch with me on a Sunday when we were in need of coverage answers immediately. We are very pleased with the hands-on service Todd and his staff provide.”
-Ken and Linda Orvick, Orvick Management Group, Inc.
We’re ready to help! Call today: 800-903-6066