If you are a small business owner and have been researching small group health insurance options, you already know that making the decision can be difficult.
There are at least six types of plans to consider, many insurance providers that offer coverage for a small group, and many features that employees may need. While it is certainly possible for a small business owner to choose and purchase small group health coverage directly from the insurance company, this is not always recommended.
Because of the relative complexity of health insurance plans, and the often confusing or overwhelming options that are available, getting advice and guidance from a trusted broker can be a better route.
What you need to know before buying
There are dozens of questions and considerations to reconcile with costing for you and your employees.
The main things you will want to know before deciding to purchase a particular health plan are:
Understand what your employees want and need most in the plan
If you haven’t done so yet, it may be a good idea to conduct a formal or informal survey of your employees to help determine their healthcare needs and wants.
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“Employees’ preference for things like discounts or co-pay levels can be influenced by their age, family size, and financial status. Also consider what doctors and hospitals they want in their network, and gauge interest in offerings like prescription drug plans or wellness programs.”
Other costs that exceed the premium when comparing plans
A common mistake many people make when choosing a health plan is simply to go for a plan with a lower monthly premium or “affordable.” Unfortunately, these plans may come with much higher co-pays and deductibles, making them less expensive than expected.
As a business owner looking to offer a small package, health insurance needs to consider all costs involved as well as premiums. These include co-payments, deductibles, and coinsurance, all of which work together in determining the total cost of the plan.
In other words, both employers and their employees must understand that, unlike lower premiums, a higher premium can generally mean a lower deductible, and even the amount the employee must pay for medical costs before the insurance begins to pay.
In addition, co-payments for office visits, if they are particularly high, can accumulate to become a financial burden on employees who visit their doctors frequently.
Adding vision and dental features can provide more options at no additional cost
As we’ve noted in other articles here, numerous surveys and workplace research have shown that when employees have health benefits that they value, they are happier and more satisfied. This often includes getting dental and vision coverage in conjunction with health insurance.
In fact, by offering dental and vision coverage, employers can add options to the benefits schedule without a corresponding increase in their expenses. This is possible because instead of your employees paying the full cost of those fringe benefits themselves, they can take advantage of group rates for benefits when offered through their employer.
How to shop for small group health insurance plans
As noted earlier, employers can purchase health insurance for a small group directly from providers that are licensed to sell insurance in their state.
However, it is important to know the main types of health insurance small businesses can choose from: PPO plans, HMO plans, qualified HSA plans and compensation plans.
PPO plans (Preferred Provider Organization)
PPO plans are the most common type of health insurance plan. Employees can choose either in-network or out-of-network doctors or hospitals but using preferred (in-network) providers means the insurance company covers a larger percentage of the costs.
HMO plans (Health Maintenance Organization)
HMO plans offer a range of health care services through a network of providers who are contracted exclusively with HMO or who agree to provide services to members. Staff generally should choose a primary care physician who will provide the majority of their care (except for emergency care) and referrals are required to see a specialist.
HSA Eligible Plans
Eligible HSA plans are PPO plans designed specifically for use with Health Savings Accounts (HSAs), which are essentially a bank account that allows participants to save pre-tax money for use specifically for future medical expenses. To be eligible for an HSA, participants must have a High Deductible Health Plan (HDHP).
There are three primary ways to purchase health insurance coverage for a small group:
If you are a business owner working to understand the many regulations and requirements for group coverage, or simply want to know the best health plans for you and your employees, having a company like JC Lewis Insurance Services to help you through this process is not only a smart move, but can be beneficial now and in the the future.
Health coverage experts for your small group
JC Lewis Insurance is a local family owned business based in Sonoma County since 1979, and our expert brokers offer insurance plans for small businesses.
Additionally, our company only offers small business health insurance plans from leading health insurance companies licensed to do business in California.
In addition to being professional, experienced brokers, we are licensed and approved by each of these insurance companies to offer coverage for small group employers as well as supplement and prescription drug plans for seniors.
When you’re considering purchasing health insurance for your employees, or for you and your family, or vision and dental coverage, you likely have many questions and concerns.
We welcome your questions about insurance coverage at JC Lewis Insurance Services, and you can trust that we will help you find the right solution.