Best Small Business Health Insurance 2020

Small business health insurance plans can provide resources that many small businesses lack. In most cases, larger organizations do not have this problem.

BY: MARK ANDREW ON WEDNESDAY, JANUARY 15, 2020
Best Small Business Health Insurance 2020

There are many benefits to offering small business health insurance coverage at your company.

Small business health insurance plans can provide resources that many small businesses lack. In most cases, larger organizations do not have this problem.

So one of the benefits health insurance plans offer is the ability to stay competitive.

Healthcare insurance can make a significant difference in whether a job seeker will work at your small business.

In a Harris poll, 86% of workers said that receiving comprehensive medical plans would influence them to choose one job over another that did not.

There are also many other great benefits that health plans offer. Yet some small business owners would prefer not to contact an insurance broker.

Mostly because of the lack of understanding about the rules and options of health insurance plans.

If you have concerns about insurance costs and administering health benefit plans, learn more about your options.

Health Insurance Options for Your Small Business

Become familiar with what you can do as a small business owner when offering health plans.

The more you know about small business health insurance, the better your decision will be.

The group health insurance you choose matters. Whether you buy a private or SHOP marketplace plan, it can positively impact your bottom line.

Your options:

  • Contact a local health insurance company to review and discuss plan options (HMO, PPO, POS, etc.), and health coverage. Talk about traditional group coverage like a SHOP plan. You might prefer a Health Reimbursement Arrangement (HRA) for your small business instead.
  • Hire an insurance broker to learn about health care and premium costs. They can help you find the right health plan for your small business. Example: More out-of-pocket expenses will lower premiums.
  • Find out if you are eligible for the Health Insurance Marketplace. The Marketplace has Open Enrollment dates and deadlines - of when you can apply.
  • Small employers with less than 50 employees can enroll in SHOP.
  • See if you qualify for the small business health care tax credit. The smaller the business, the bigger the credit.
  • If you do not have any employees, look for family or individual health insurance. Consider setting up a Health Reimbursement Arrangement (HRA). A tax-advantaged account that lets you get reimbursed for qualified medical expenses.

You must have a primary business address in the state where you are buying coverage. You also need at least one employee enrolled in the coverage you offer. This employee must not be the owner, business partner, or spouse of the owner or business partner.

Keep in mind that minimum participation requirements can be different. Check what they are in your state.

Marketplace Eligibility

Understanding eligibility requirements, coverage options, and costs can help you decide.

To be eligible for health coverage through the Marketplace, you:

  • Must live in the United States.
  • Must be a U.S. citizen or national (or be lawfully present).
  • They cannot be incarcerated.

If you have Medicare coverage, you are not eligible to use the Marketplace to buy a health or dental plan.

Affordable Care Act Requirements

There is still much to learn about the Affordable Care Act (or "Obamacare"). The Act has made strides with improving personal, family, and business health insurance.

Here are some ACA requirements you need to know:

  • Businesses with less than 50 full-time employees do not have to provide health insurance.
  • Businesses with 50 or more FTEs have to provide health insurance. The Affordable Care Act (ACA) requires this of you. It is the law.
  • If you do not provide insurance, you may have to pay the penalty. This can range between $2,000 to $3,000 per employee when you file your taxes.

If you have 50 or more FTEs, the ACA requires you to do these three things:

  • Offer a qualified group health plan to eligible employees and their families
  • Ensure that the health plan is affordable for all employees
  • Complete required IRS forms: 1094-C and 1095-C each year

Factors to Consider When Choosing Health Care Insurance for Your Small Business

As the owner of a small business, you must decide on which group health plan to offer your employees.

There are three significant factors to consider before choosing a health plan.

  1. The 4 categories of health insurance plans (Metal plans)

Bronze, Silver, Gold, and Platinum. These categories show how you and your plan share costs. Plan categories have nothing to do with the quality of care.

  1. Total Health Care Costs

Pay a monthly bill, which is a premium to your insurance company. Even if you do not use medical services that month.

You will need to consider costs that go beyond health insurance premiums. This includes out-of-pocket expenses, high-deductibles, copays, and coinsurances. Consider all costs when choosing an insurance plan.

  1. Different plans and networks

Some programs allow you to use any doctor or health care facility. Others limit your choices. They may also charge you more if you use providers outside their network. Plans can be HMO, PPO, POS, and EPO.

Small Business Insurance Plans

You can buy group plans for health insurance through the Small Business Health Options Program (SHOP). There is also the option of buying from a private health insurance provider.

It can be one plan or a selection of plans for eligible employees to choose from.

Enrolling in a SHOP plan is usually the only way for an eligible small employer, including non-profits, to claim the Small Business Health Care Tax Credit.

You may qualify for savings if you have fewer than 25 full-time employees making an average of about $50,000 or less.

Depending on your location, you may have access to some or all plans and metal levels — Bronze, Silver, Gold, and Platinum.

Examples of Marketplace plan types:

  • Exclusive Provider Organization (EPO):

A plan where services cover expenses only if you use doctors and hospitals in the plan’s network. (Except in an emergency)

  • Health Maintenance Organization (HMO):

An HMO may require you to live or work in its service area to be eligible for coverage. The plan usually limits coverage for care from doctors who work for or contract with the HMO. It will not cover out-of-network care except in an emergency.

  • Point of Service (POS):

A plan where you pay less if you use hospitals and other health care providers inside its network. POS plans require a referral from your primary care doctor to see a specialist.

  • Preferred Provider Organization (PPO):

A health plan where you pay less if you use providers in its network. You can use doctors and hospitals outside the system without a referral, but it will cost extra.

To learn more about plans and specific pricing in your area, visit the government website. Once there, enter your business location and zip code into the form at healthcare.gov for small businesses.

Business Health Insurance Alternatives

If you do not qualify for a typical group health insurance plan, there are alternatives. There is a small employer health reimbursement account called QSEHRA.

You can choose programs like:

  • Integrated HRA
  • Private Insurance Exchange for small businesses
  • Taxable stipends for employee health insurance.

You may also want to consider offering extra health benefits. Example: Add dental and vision plans or contributions to health savings accounts.

If you have no employees, there are different health insurance plans for you. If you are self-employed, a consultant, freelancer, or sole proprietor, you have options. However, they vary from state-to-state.

Some U.S. states allow individuals to buy group coverage if registered as a business.

Conclusion

If your business must provide health insurance, it depends on the size of your company.

For companies with over 50 full-time employees, you must provide it. Otherwise, you will face a hefty fine. If it is lower than 50 FTEs, you are not legally obligated to offer insurance.

There are many other reasons to provide small group health insurance at your company. This includes how most employees want to work for a business that offers health benefits.

Give the workers what they want.

Find the best small business health insurance for your company to offer employees.

About the Author

Mark Andrew

Mark is a freelance content writer specializing in topics such as Internet marketing for small businesses. His goal is to help small businesses owners understand what types of services and products truely bring in more business.

Full Biography