Did you know that medical bills are the single largest contributor to bankruptcies in the United States? Unfortunately, too many patients learn how significant health insurance is too late when they are forced to make hard decisions about medical treatments. The truth is that the majority of people don’t get the right health insurance plan, or don’t get it at all, because the options out there are simply overwhelming. This is especially true for small business owners, who have stressed enough juggling with their finances to also deal with all the health insurance options for their employees. Luckily, we’re here to help. Before we navigate around the health insurance options, let’s answer some of the common questions you may have as a small business owner:
Is it mandatory for a small business to offer health insurance?
No, it’s not. However, the Affordable Care Act includes a mandate for large employers (with over 50 full-time employees) to either offer qualified and affordable health benefits, or pay a tax penalty. So, if you have less than 50 employees, why should you care to provide health insurance? Because it has tax advantages. Because by covering your staff, you’ll keep your employees healthy and productive. It’s a great way to keep them motivated and reduce the turnover rate. If you decide to offer health insurance for your employees, you can find plans even for only three participants.
How much is going to cost me?
Your small business has to cover at least 50% of the cost of health insurance for your employees (this excludes their families). On average, the premium for employees at small businesses nationwide is around $6,000 a year, which equals about $500 a month.
Learn other ways you can invest in your employees for a better workplace
What is Open Enrollment?
Health insurance plans set aside a few weeks at the end of the year to allow individuals to apply for health insurance for the following year. This is called Open Enrollment. As a small business owner and especially if you don’t have a Human Resources department that takes care of this, you can’t miss the dates! It can be very expensive in the long run. The 2019 Open Enrollment Period runs from Thursday, November 1, 2018, to Saturday, December 15, 2018. If you don’t act by December 15, you can’t get 2019 coverage unless you qualify for a Special Enrollment Period. Plans sold during Open Enrollment start January 1, 2019. Next, let’s learn about your health insurance options as a small business owner during Open Enrollment.
3 Main Health Insurance Options for You and Your Employees
1. SHOP Marketplace plans
This is the most common choice for small business owners shopping for health insurance plans. They can use www.HealthCare.gov as a resource for Small Business Health Options Program (SHOP) plans. It’s easy: in the link above just enter the zip code where your small business operates to access your available SHOP plans. Be mindful that SHOP plans are not available everywhere. If that happens to be your case, you have other options to get health coverage for your small business:
2. Directly from an insurance company
You can contact any health insurance company and see what plans they offer in your area. Most of them have websites that let you compare the different plans they sell. Companies like Aetna or HealthNet for example, have easy-to-follow websites tailored for small businesses. You can also contact a general insurance company to see if it offers health plans in your state. Have in mind, however, that usually, it’s hard for a small business to get the best rate straight from an insurance company.
3. With an insurance agent or broker
Generally, agents work for a single health insurance company, while brokers sell plans from several. The good news is that you don’t pay more by using an agent or broker (they’re generally paid by the insurance company whose plans they sell), and both can help you compare prices and features in different plans. They are especially useful when it comes to lead you through the application process. Also, they can help you create a health plan “portfolio” by combining different health insurance plans to address your specific needs as a business owner. In other words, they can tailor a plan for you and your employees according to your budget and goals. This is especially relevant for those business owners with employees with disabilities, or if your industry field poses some risks in the work field (for example, some types of construction businesses).
Yes, health insurance options can certainly be a maze. Rarely does one health plan match exactly to another. Health insurance terminology is difficult for most of us to understand. Premiums vary depending upon the ages and health of their insureds, among many other factors. That’s where a health advisor can help you. Once they have learned about your needs and budget, they can focus their research in a plan or combination of plans that better suit you.
Most of us and especially business owners, recognize the need to have “experts” we rely upon: financial planners, bookkeepers, IT consultants, tax preparers and lawyers are all part of the trained, knowledgeable sources we call upon to help us make the best choices for our finances, resources, and future of our families. In today’s health insurance and medical environment, an expert who is licensed, trained and up to date on what plans are offered in your area is a required resource as well.
If you as a business owner you are willing to spend money out of your pocket each month to offer health insurance for your employees, find an expert to make sure you get the right plan.
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