Offering health insurance to your employees is one of the most impactful benefits a small business can provide. Not only does it help attract and retain top talent, but it also fosters a healthier, more productive workforce.
However, navigating the complexities of how to get small business health insurance can be overwhelming.
That’s why we’ve put together this step-by-step guide to help you through the process.
1. Assess Your Business’s Needs
No two businesses are the same, and their health insurance needs will vary. Before diving into plans and providers, take some time to evaluate your business’s specific health insurance needs. Consider the following:
- Employee Needs & Preferences: Conduct surveys or analyze workforce demographics to determine the types of coverage employees value most, whether it's lower premiums, comprehensive networks, or additional benefits like dental and vision.
- Usability: Look for plans that offer user-friendly technology for easy enrollment and management. Flexibility and scalability are also important to accommodate your business's future growth.
A well-matched health insurance plan ensures employees get meaningful coverage while still making sense for your company.
2. Understand Your Legal Requirements
Depending on your business size, you may be required to offer health insurance. Businesses with 50 or more full-time employees are legally required to provide coverage under the Affordable Care Act (ACA). However, for businesses with fewer employees, offering benefits can give you a competitive edge. Additionally, businesses with fewer than 25 employees may qualify for the Small Business Health Care Tax Credit if they meet specific requirements.
3. Decide on a Budget
Determining your budget for health insurance is crucial. Start by evaluating how much your business can contribute toward premiums while ensuring affordability for employees. Consider factors such as:
- Understand Current Finances: Review your business’s current financial standing. Based on what you bring in on a monthly basis, what can you effectively budget for a health plan?
- Consider Possible Future Changes: Finances can change quickly, for better or for worse. Consider what the next few months could look like given what projects you have upcoming or what the market looks like.
- Utilize Tax Credits: Programs such as the Small Business Health Options Program (SHOP) can offer deductions and tax breaks that can greatly impact your health plan costs.
By carefully assessing these factors, you can offer an effective health insurance plan for your employees while still making the most out of your budget.
4. Work with a Benefits Consultant
Navigating health insurance options can be complex, which is why partnering with a benefits consultant like Paradigm can be a game-changer. A consultant can help you with the following steps, including:
- Identifying the best plans for your business and employees
- Understanding cost-sharing options and staying within your budget
- Ensuring compliance with regulations
- Streamlining the enrollment process
With expert guidance, you can develop an effective health plan that fits your specific needs and budget.
5. Research Health Insurance Options for Small Businesses
There are a variety of health insurance options available for small businesses—each covering different needs and aligned to different budgets. Familiarizing yourself with the different options can help you choose the best for your business.
Some of the main plan types include:
- Traditional Group Health Insurance: A standard employer-sponsored health plan that covers employees and, in some cases, their dependents.
- Health Maintenance Organization (HMO): Lower costs but requires employees to use a network of providers.
- Preferred Provider Organization (PPO): Higher flexibility but typically comes with higher premiums.
- High-Deductible Health Plan (HDHP) with HSA: Lower premiums with tax-advantaged savings options.
- Exclusive Provider Organization (EPO): Similar to HMOs but with no out-of-network coverage.
- Association Health Plans (AHPs): Allows small businesses to band together to purchase coverage as a larger group, potentially lowering costs.
- Level-Funded Health Plans: A hybrid between fully insured and self-funded plans that offer cost predictability with potential refunds for lower-than-expected claims.
6. Explore Government Programs
Small businesses may be eligible for government programs that provide more affordable options. It’s important to research these options to see what you may qualify for.
- The Small Business Health Options Program (SHOP): A marketplace offering group health plans tailored to small businesses.
- The Small Business Health Care Tax Credit: Available for businesses with fewer than 25 employees that meet certain criteria.
- State-Specific Programs: Some states offer additional programs that provide cost-sharing assistance or expanded coverage options.
Exploring these programs can help you find affordable coverage while maximizing potential tax benefits.
7. Compare Insurance Providers
Once you understand your options, it’s time to decide on a provider. With the many options available, it’s important to consider a number of factors to ensure you partner with the provider most aligned with your business and employee needs. Compare different providers based on:
- Cost: Premiums, deductibles, and co-pays. Find the best value while providing the level of coverage you’re looking for.
- Network Coverage: Local vs. national networks and provider availability. Make sure they cover the area where your employees need access to care.
- Additional Benefits: Coverage for dental, vision, mental health, and wellness programs. While these aren’t required, they can make your insurance plan more competitive.
- Customer Support & Resources: How easy it is for employees to access support and file claims.
A benefits consultant can help you analyze these factors and find the best provider for your business.
8. Choose & Apply for Small Business Health Insurance
After selecting a health insurance plan and provider, it's time to enroll. To ensure the most effective enrollment for both you and your employees, follow these steps:
- Formally enroll your business with your provider. This will require details like your business tax ID, how many employees you have, and what plan you’re enrolling with.
- Collect any necessary information from your employees—such as Social Security numbers and information on their dependents.
- Inform your employees about open enrollment and make sure they have access to resources they need. Be sure to share all necessary information and documents with them so you understand their benefits.
Work closely with your benefits consultant to ensure a smooth enrollment process and compliance with regulations.
9. Keep Employees Informed
Providing health insurance is only beneficial if your employees understand how to use it. Offer informational sessions, one-on-one meetings, or digital resources to explain:
- Coverage details and benefits
- How to find in-network providers
- How to use health savings accounts (HSAs) or flexible spending accounts (FSAs)
- Steps for filing claims and accessing customer support
Clear communication ensures employees maximize their benefits and appreciate the coverage provided.
10. Review & Adjust
Health insurance needs and options change over time, so it’s essential to review your plan each year. As your business, preferred employee, and budget change, be sure to update your benefits package in order to stay competitive. Consider employee feedback, plan performance, and cost adjustments. A benefits consultant can help reassess your options and make necessary adjustments to ensure continued satisfaction.
Selecting and managing health insurance doesn’t have to be overwhelming. When you understand how to get small business health insurance, you can confidently choose a plan that supports both your employees and your bottom line. If you need expert guidance, Paradigm can help simplify the process and ensure you make the best decision for your team. Start exploring your options today and invest in a healthier, more secure future for your business.
Please let us know if you have any questions. We understand that local companies have unique needs that most national firms don’t consider or struggle to identify. This leaves your people with a less effective, one-size-fits-all benefits plan. However, our ability to cater to the needs of our clients comes from decades of client partnerships. This perspective allows us to fully address unique needs and generate creative benefits plans.
You shouldn’t have to worry about just being a number, offering a generic plan, or getting the unique support you need. Call us today.
This Benefits Insights is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice.