You might be wondering where to start when you’re shopping for health insurance for your employees. It’s also important to stay up-to-date on the latest group health insurance options available as an employer. In this blog post, we’ll walk you through how to research and shop for group health insurance, new options and tips on what to look for when making your decision. Let’s get started!
Are You Required To Offer Health Insurance To Your Employees?
Small businesses with less than 50 employees are no longer required to provide health insurance to their staff under the Affordable Care Act (ACA). However, for companies with 50 or more employees, offering “affordable” coverage still remains a legal requirement.
To remain compliant with the “affordable” component of the law, health insurance costs can be no higher than 9.78% of your employees’ annual salary; failure to meet that requirement results in a steep penalty of $2,320 per full-time employee (excluding your first 30 employees).
Why should you offer small business health insurance?
Offering benefits helps your company remain competitive in today’s challenging labor market because benefits show your employees that you value their health and wellbeing, not just their productivity in the workplace.
When it comes to offering the most impressive benefits, healthcare coverage is at the top of every employee’s wish list. Along with other options, like flex hours, hybrid work environment and PTO allowances, having a comprehensive health insurance plan can really set you apart from other employers in your industry – creating an environment where employees feel valued and will remain loyal for years to come.
The health insurance plan you provide costs money, but it can end up saving you money in the long run as it helps you reduce turnover and retain top talent. According to a Willis Tower Watson survey, 78% of employees surveyed say they would be more likely to stay at their job if they’re offered benefits. To learn more about what employees are looking for, see our 2023 Employee Benefits Benchmarking Report. Thinking of your group health coverage as a long-term investment makes its value infinitely more important.
Learn More About Group Health Insurance Coverage Types
There are many different types of group health insurance plans, and each one has its own advantages and disadvantages.
There are more traditional options like fully-funded plans where the insurance company takes on the risks involved with healthcare costs or self-funded plans that place the burden of risk on the employer.
Unlike more traditional plans, level-funded plans are based on a monthly payment rate based on several factors:
- claims allowances
- stop-loss coverage
Once the plan year is over, the insurance carrier will then adjust monthly levels based on the group’s performance.
Then there are Health Maintenance Organizations (HMOs), Preferred Provider Organization (PPOs), High-Deductible Health Plans (HDHPs), Exclusive Provider Organizations (EPOs). Plus, account-based plans like Health Reimbursement Accounts (HRAs) that can be used to reimburse costs to employees.
If you want to learn more about the types of group health plans, contact us. We can answer all your questions and find the best plan to meet your budget and needs.
Where can you find affordable small business health insurance?
Finding a health insurance plan that works for yourself and your employees can be daunting, but it’s not impossible! There are a few methods to choose from if you have between two and 50 full-time employees. However, remember there is also the option of outsourcing this process for an additional cost. With diligent research into all paths available, finding the right plan should become achievable in no time!
Consult with a Local Insurance Agent
It’s no secret that health insurance shopping can be a confusing and intimidating task to navigate, but there’s no need to struggle on your own. There are licensed agents who specialize in making it easier so YOU can focus on running YOUR company!
A licensed agent will take care of helping to find affordable plans. They can ensure it’s tailored just right to your needs to navigating pesky paperwork.
We have a national network of agents in all 50 states so they’re knowledgeable in healthcare policy in your state. When you work with one of our local agents, they can also meet in person. This can give you answers immediately rather than going back and forth through phone calls or email. They will also be available post-open enrollment to answer questions or explain benefits to your employees.
Use The Small Business Health Options Program (SHOP) Marketplace
The Small Business Health Options Program (SHOP) is a federal exchange database where you can locate and compare health insurance plans in your state. Their site is typically easy to use and lets you search by various filters.
SHOP also allows the smallest businesses to benefit from up to 50% of premium credits, significantly reducing financial costs associated with healthcare coverage, see more about this later in this article.
Use A Professional Employer Organization (PEO)
Working with a Professional Employer Organization (PEO) could be an attractive option when seeking comprehensive employee solutions beyond traditional health insurance. PEOs offer competitive rates and additional services, such as payroll management, recruitment assistance, and tax filings – maximizing your organization’s resources without compromising quality service coverage. However, PEOs are not free and can become costly depending on your employee size and services selected.
Get in touch with health insurance providers directly
In order to explore the best options for coverage and care, you can contact health insurance providers directly. Taking the initiative to contact health insurance companies could be your ticket to securing better rates than going through a third party. Utilizing consumer review sites is another easy way to find out what providers you qualify for!
Unlike individual or family health insurance plans, group coverage could cost less and cover more. Group health insurance gives employers the opportunity of providing wider ranging benefits than one could achieve through individual policies, which is extremely attractive to jobseekers. The plans also usually cost less than an individual policy because most employers cover some of the premium cost.
Health insurance premium rates are regulated by each state’s Department of Insurance so the premium an insurance company charges for a specific health plan will be the same wherever you buy the plan.
However, your business’ specific factors (age of employees, industry, size, etc.) can affect this pricing.
Using average costs as a benchmark can help with your budgeting, but it’s also recommended to keep total premium costs around 10 to 20 percent of your overall revenue. Employee contributions should be about 10% of an employee’s annual income. According to the Kaiser Family Foundation’s 2022 Employer Health Benefits Survey, the average annual premium for employer-sponsored plans was $7,911 for single coverage and $22,463 for family coverage.
Find Out If You Qualify For The Small Business Health Care Tax Credit
As a small employer, you could qualify for The Small Business Health Care Tax Credit if your plan is purchased through the Small Business Health Options Program (SHOP) Exchange. If you meet certain criteria such as:
- Having fewer than 25 employees
- Offering health insurance to all your full-time staff
- Paying an average salary of less than $50,000 per year (on average) and
- Contributing at least 50% towards their premiums
You could receive up to 50% back from your contributions toward employee premiums, which would significantly lower your costs.
The bottom line is that it’s more important than ever to do your research and shop around before choosing a health insurance plan for your small business. By taking the time to explore the different types of coverage and pricing plans available, you can make the most educated decision. Plan types, tax credits and premium costs all need to be taken into account before committing to a plan for the next year.
If you don’t have time to spare shopping around or would like expert advice, then consulting with a licensed insurance agent is another great way to get coverage. An insurance agent can help you find the best small group health insurance plan for your business.
If it’s your first time offering your employees health insurance, the agent you’re assigned to can help answer questions and communicate benefits with your staff. They’ll help you navigate the law and find out if you qualify for additional tax savings.
If you already have a plan and are looking to renew, you might be surprised at how much money you can save compared to your current plan. The healthcare industry is constantly changing and providers aim to stay competitive, so employers who regularly compare quotes save more in healthcare costs over their peers who do not.
Don’t wait – call (877) 658-2374 to speak to an agent over the phone or enter your zip code in the bar above today to get quotes and compare plans online! We’ll match you with just one local agent, not multiple, so there’s no hassle and absolutely no spam calls.