Managing healthcare coverage for employees can seem like a daunting task for a small employer. It’s an additional to-do to what seems like an endless list of tasks. Take Command also understands selecting, offering, and managing small business health insurance can seem overwhelming. However, we’ve compiled a short list to help guide small employers, like you, through the choppy waters of healthcare and set you up for smooth sailing.
Whether you're just getting started with small employer group health insurance or making a change with small business employee health insurance, having a solid foundation of understanding on these health insurance plans will help you make the best choice for your small business plan. Health insurance small group options are better than you think, including alternatives to group health insurance!
Getting started with small employer health insurance
Here are five helpful tips as you weigh your options for small employer health insurance. Small businesses have their unique needs as growing companies, and so do the small business insurance plans that work best for them. Before talking to a health insurance company or small business health insurance broker who sells health insurance, take the time to consider our 5 tips.
Consider the below your homework!
- Learn about the basics of offering health insurance.
As a small employer, you probably know that federal law only requires employers with 50 or more full-time employees to offer healthcare coverage. This means small employers are not required to offer healthcare coverage. But offering healthcare could help you come tax time. As a small business owner, you may be able to deduct the cost of healthcare premiums from your taxes. Additionally, if you offer small business health insurance to your employees, they may be able to exclude the value of their coverage from their taxable income.
- Understand what your employers need for healthcare.
Just like each employee is unique, so are their healthcare needs. It’s important to understand what kind of coverage your employees need and are looking for from their employer-sponsored healthcare plan. Gaining insights into employees' preferences will help you determine what type of plan and coverage to offer with your small employer health insurance.
Do your employees have a preferred network of care? If most of your employees prefer a particular hospital or doctor, it may be worth considering a plan that includes them in-network.
What kind of health insurance coverage do your employees need? Are your employees looking for basic coverage or do they need something more comprehensive for health insurance? Understanding what your employees are looking for in terms of specific health insurance coverage will help you narrow down options and find the right plan for small employer group health insurance.
Suggestions on ways to gather insights:
- Distribute an anonymous survey
- Encourage employees to email a human resource representative
- Speak directly to employees
- Determine a budget.
Healthcare is a great benefit to offer your employees. But it’s important to understand your budget before searching for healthcare coverage. This will help you to better navigate costly quotes. To give you a ballpark estimate, the Kaiser Family Foundation in 2021 reported the average annual cost of employee health insurance premiums for a self-only plan was $7,739. Premiums for small business employee health insurance are typically shared between the employee and employer; the percentage may vary in different states and/or insurance providers.
- Understand the benefits of offering health care coverage.
The job market is competitive. Recruiting and retaining talent takes time and money. According to a 2022 Investopedia article, hiring costs go beyond the salary. When you factor in recruiting, screening, and training employees, even an $ 8-an-hour employee can cost $3,500 in turnover costs. By offering small business healthcare benefits, you help your chances of keeping employees long-term. According to an America’s Health Insurance Plan (AHIP) survey, health coverage was a key factor for 56% of employees when deciding whether to remain at their current jobs.
Not only do you have a better chance of attracting and keeping talent, but employees may also make for better workers.
According to the CDC, a workplace health plan can increase productivity and reduce absenteeism. These are both great benefits to employers.
- Know your options.
It's important to understand that different types of small business health insurance plans are available, and each has its own set of pros and cons. Most people think of group insurance when they think of health plans; however, there are also HRAs, Health Reimbursement Arrangements.
- Group Health Insurance: All employees get the same coverage with small group health insurance. You don’t have the opportunity to tailor a plan for an individual. Here are the requirements necessary to offer small business group health insurance.
- A minimum of 2 full-time employees
- All full-time employees working 30 or more hours per week are offered coverage
- May have an enrollment percentage requirement
- HRAs: For some employees, HRAs may be an appealing alternative to traditional small business employee health insurance. Two common HRAs for small employers include the ICHRA, Individual Coverage Health Reimbursement Arrangement, or the QSEHRA, Qualified Small Employer Health Reimbursement Arrangement.
- With an ICHRA, you can reimburse your employees for the cost of their individual health insurance premiums, up to a specified amount. With a QSEHRA, you can reimburse your employees for the cost of their individual or family health insurance premiums, as well as out-of-pocket expenses like deductibles and copayments.
- Both ICHRAs and QSEHRAs are appealing to small employers because you get to set the budget for your small employer health insurance. This means no surprise premium hikes. HRA coverage is essentially a cost-controlled alternative that gives your employees choice over their healthcare coverage. You can compare QSEHRA vs ICHRA or ICHRA vs group plans here.
Need help with small employer health insurance?
We're here for you. If you're looking for health insurance plans for your small business to offer healthcare for your employees, we will help you assess your needs and what's best for you in terms of health insurance products and options.
Just click on the chat button at the bottom of your screen for health insurance support or schedule a call with us by clicking the green button below. We'd be happy to help you take care of your employees.
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With 15 years in the communications field, Briana is a content writer with a passion for making complex issues readable, understandable, and digestible. Her career is layered with experience working with Fortune 100 companies, non-profits, and start-ups. She specializes in employee benefit communication. Briana is a married mother of two young girls in the Midwest. She loves yoga, volleyball, and reading by the pool.