How To: Find Affordable Small Business Health Insurance for Your Employees
Posted by Amanda DiSilvestro on August 17, 2011 in Business Insurance, Business News, Medical Information [ 2 Comments ]
Any business owner would agree that employees are essential to (and in some ways completely responsible for) the success or failure of a business. In other words, treating your employees well is the sign of a company that knows the value of their employees’ work, and this appreciation can go a long way.
If you want to treat your employees’ right, take it from me, a current employee – good health insurance is the way to go.
Good health insurance protects your employees and gives them a sense of security for themselves and their families – something that is sure to boost morale around the office and make your company attractive for hires in the future. While this may seem like a no-brainer, many companies find themselves in over their heads because the cost of health insurance can be so high.
The question then becomes: You want to help your employees, but you’re on a budget. How can you find health insurance that is affordable?
Due to the economy, health insurance prices keep going up. Consider some of the numbers and points myhealthcafe.com gathered from research conducted by America’s Health Insurance Plans, a national association for the health care industry, in 2010:
- The average monthly premium for small-group health insurance was $426 for single coverage and $1,117 for family coverage.
- The cost depends on the size of your company. Small businesses with 10 or fewer employees paid an average of $446 for single coverage in 2010 as opposed to the $406 companies with 26 to 50 employees paid.
- Premiums also vary by state depending on if your state has considerable enrollment. Due to this factor, premiums can range from $565 to just $302 for single coverage across the states.
Things to Consider When Choosing a Health Care Plan
The high cost of health care is affecting many small businesses across the country not only from a financial standpoint, but from a hiring perspective. If you want to keep the talent on your side and not lose it to big business, but still require a budget, consider a few of these tips to find an affordable health insurance plan:
- Talk to Your Employees and Ask for Their Opinions
Figure out what aspect of a health insurance plan is an absolute necessity to your employees, both long and short term. If you are looking to save some money in this area (while still providing quality health benefits), you may find that a plan with a lot of benefits is expensive, but expensive plans are not always needed. Once you assess your employees’ requirements you can pick the plan that fits with your employees’ needs and your company’s finances. It is also possible to let your employees pay for a portion of the insurance if they want certain benefits. This way, everyone will not have to pay for the benefits that only a few people find necessary, and you will have more flexibility to choose a plan when the time arrives.
2. Get Rate Quotes from Different Companies
Once you know what your employees are looking for in a health care plan, you should get quotes from different insurance companies. You can do this one of two ways: either contact insurance companies directly, or talk to an insurance broker. The companies will lay out a plan for you complete with the details of each. This will lay out the different benefits each company has to offer so you can easily compare and make sure you stay affordable.
3. Pay Attention to Deductibles and Co-Pays
If you are looking to stay affordable, than be sure to check out the deductibles and co-pays. Both are money that your employees will have to pay whenever they get sick or need to be hospitalized. While a plan may look great because the monthly premiums are so low, there may be a high deductible, which would not make your employees happy, so do not be fooled.
4. Know Important Health Insurance Terms in order to Avoid Hidden Costs
While deductibles and Co-pays are the big numbers to watch out for when researching, you will be prompted to analyze several parts of a health care plan. If you do not know what some of the key terms mean when it comes to choosing a plan, you could make a wrong, very expensive decision. The major terms to know include:
- Premium – the amount you pay to the health insurance company each month in order to continue coverage.
- Coinsurance – the amount you are required to pay after you’ve paid any co-payment or deductible. In other words, if they will pay for 80% of charges, the extra 20% is the coinsurance you must pay.
- Maximum Out-of-Pocket Costs – Deductibles, copayments, and coinsurance are considered costs that you pay out-of-pocket. An insurance company will set a maximum on these costs, so this is an easy way to see if there are any fees you disagree with—simply ask.
Searching for a quality health care plan can seem overwhelming, but do not simply sign off on something that covers it all. It is very common for small businesses to choose a basic health insurance plan. In fact, if you have a health insurance plan in place for your small business, you are already ahead of the curve and looking very attractive to potential employees.
Photo credit freecahealthinsurance.com
Editor’s Note: This “How To” blog geared towards small business owners will run each Wednesday, the goal being to assist small business owners in their day-to-day operations. As a small business owner, is there a topic you would like to see covered? If so, email: Amanda.DiSilvestro@resourcenation.com