It’s a well-known fact across industries that an organization’s true asset is its human resource core. This thoughtful realization has lead business owners to invest in buying small business health insurance. Considering the gravity of that, it is not just money but a great deal of time and effort that goes into zeroing down on a plan that caters to your business’s needs and the administrative follow-ups that lead to its materialization of the chosen plan.
Keeping that in mind, here is a quick heads up that could help you organize your thoughts on the same and give you a little clarity in terms of choosing the best health insurance that meets with your business needs.
Money Comes First
There are three key points that govern the monetary cost of providing small business health insurance.
- the scope of benefits covered under the plan
- the percentage of the premium that is to be covered
- the individuals who fall under the cover (is it just the employees or their dependents as well?)
Apart from that, in case you are using the services of a broker, PEO, or any kind of other third-party services to assist you with the process, you will have to keep in mind their service fee too. However, this fee is remunerated by the carriers directly and in most states, the premiums are not governed by the usage of a broker.
The best approach to go about accounting for these expenses is either as a percentage of your payroll or on a monthly, per-employee cost basis.
Time and Effort
Confused by the plethora of insurance plans around you? Yes, narrowing down on a small business health insurance plan that meets your business model most suitably is quite a tedious task that involves a lot of time and analysis.
You would find yourself spending a lot of time and energy looking up the internet for service providers, attending to the time consuming but necessary paperwork, filling out forms, discussing your employee requirements and consulting with associate entrepreneurs and small business health insurance gurus.
In addition to this, you will also have to re-examine your health insurance plan annually to cater for the enrollment of new joiners and ensure its proper maintenance on a regular basis.
Before you make a kick start towards handpicking the best-suited health insurance plan for your
business model, let’s reflect on certain basic requirements that you must keep at the back of your mind before taking the plunge.
Here are some primary requirements that would come in handy while picking out a suitable small business health insurance:
- Business details (Name, Start Date, Duration, etc)
- Business address (not a P.O box but a proper street address)
- Industry code (SIC)
- Payroll records
- List of all the full-time employees
- Tax ID / Employer Identification Number
Owing to the fact that you would be looking for a group coverage plan, in addition to the requirements mentioned above, you will have to provide an “Employee Census” that contains a detailed account of each of your employee’s demographics. These include:
- Number of dependents
- Zip codes
This data will enable the health care provider to zero down on the premiums (and costing) that could go well with your business model and employee risk levels.
You can choose to offer your employees certain choices of varied premiums and payment plans to select from as per their convenience instead of selecting a single standard insurance plan. However, the employer’s bill will remain under control since it’s he who will get to choose the percentage of the medical coverage that they wish to consider.
Hiring an Insurance Broker v/s Buying Insurance Directly
There are several pathways that can lead you up to your desired small business group health insurance plans. These include:
- Getting in touch with the health insurance companies directly
- Hiring an insurance broker or a Professional Employer Organization (PEO)
- Collaborating with Purchasing Alliances or Associations
- Using the Government’s Health Insurance Exchange (SHOP)
Out of these the most commonly used alternatives are channeling through an insurance broker and purchasing insurance directly. While some insurance companies prefer to channel through brokers, some of them work in direct relation with the business clients.
If your groundwork is already in place, which involves choosing a suitable insurance company and plan, you can consider getting in touch with the provider directly. This will enable you to an attractive rate since you are ruling out the possibility of any third party expenses by going straight to the source. Approaching your insurance provider directly also empowers you with the authority of almost full decision making in the matter. So if you are a small business owner with a clear understanding of all the nitty-gritty that goes into picking a suitable insurance plan for your organization, this may be the right option for you.
Another reasonable way to go about scouting for a suitable health insurance plan is to channel with a licensed insurance broker. But before you go ahead and seek professional help, you must know that the more you involve third parties in your decision making, the more you will gain on time and lose on the money.
Keeping that in mind, here are some pros of hiring a broker to assist you with the decision making:
- Outsourcing the job, saves big on the time and effort, since you considerably cut down on the lengthy process of research and analysis. This time and effort saved can be utilized towards the growth of the business instead.
- Seeking out professional help enables you to handpick the most suited insurance policies for your business model, aid their implementation as well as their renewal.
- An experienced licensed broker comes to your rescue when you are stuck up beneath the huge pile of paperwork by assisting you with the same and simultaneously making sure that your business model is compliant with all the relevant industry laws.
You are almost done with it! Choosing the best small business health insurance out there for you, your employees and your business can be very confusing and frustrating. However, offering the best health insurance policy will enable you to gain a competitive edge over your contemporary organizations by bringing down the employee turnover and encouraging your employees to be healthy and happy. It’s a choice that always pays off.