Health Insurance For Small Business – Knowing small business health insurance can feel like one of the hardest stressful parts of running your business. Everyone should have health insurance coverage – but the rules and options available are out of reach.
As a small business owner, you may feel at a disadvantage because you don’t get the support of a large HR department to help you. This is reflected in the figures. According to the Bureau of Labor Statistics, 88% of employers who work for it have more than 500 employees who provide health insurance, but only 55% of employers who work for it have fewer than 100 employees.
There is clearly a gap between health insurance and small businesses. Understanding health insurance is the key to eliminating this gap. Make things a little easier for yourself by reading this comprehensive guide to find the best plan and choose it for yourself and your employees. Learn what questions to ask, what your plan options are, and what cost. This infographic summarizes the main points, and you can search the details below.
Health insurance for small business
When you have a small business, it’s a good idea to pay attention to all your expenses and make sure you stay within budget. With this in mind, it really makes sense to wonder if health insurance really matters if you only have a few employees. The answer is very yes. Health insurance is one of the things that works for you and maintains your competitive advantage.
Here’s why you should get health insurance for small businesses:
- It’s legal if you have 50 or more employees
If you have 50 or more full-time employees, you are legally required to provide affordable health insurance under the Affordable Care Act. “Affordable” health coverage means that employees’ annual costs should not be higher than 9.86% of their annual income in 2019 (9.56% in 2018). Don’t offer your subject coverage for a $2,320 fine per full-time employee, except for the first 30 employees.
- Better group coverage for employees
Individual health plans provide coverage only for yourself or your family. Group health insurance plans for small businesses have certain advantages over individual health plans.
Group coverage is insurance that companies buy and provide to qualified employees and their dependants. Although group plans typically need at least two members, some states allow “Group One” as well, so check your local rules to make the best choice.
The insurance company will collect some basic demographic information about group members — such as age, geography, etc. — before explaining your plan options. Typically, group health coverage is more affordable for employees and provides wider coverage. You can split premiums with employees or cover the entire premium, depending on your budget.
- You will get tax breaks.
Buying health insurance for yourself and your employees can help you qualify for tax credits. To qualify, you’ll need to buy a plan through the Exchange of The Small Business Health Choices Program (SHOP), an insurance portal created by the Affordable Care Act.
You can qualify if you have completed the Following Requirements:
- They have fewer than 25 full-time employees, or equivalent working hours.
- Provide health insurance to all your full-time employees.
- Pay less than $50,000 per full-time employee, on average, each year.
- Front at least 50% of the cost of health insurance premiums.
The small business tax credit varies according to aspects of your company, but you can get up to 50% of your contributions to employee premiums. This significantly reduces the cost of providing benefits to your employees as plaintiffs.
- Get other tax benefits
In addition to shop tax credit, you’ll also be able to write off the health insurance premiums you pay as a tax deduction, saving you more money. Small business owners can save a lot by cutting costs, and health insurance premiums are one of the most common small business tax deductions out there.
In addition, with a few additional papers, you can arrange your health insurance so that your employees can pay their share of the premiums with pre-tax money. They save money, making them happier and more satisfied with their work: winning.
- Improving job satisfaction and employment
Health insurance is a big deal for people who hang out for a new job – and providing health insurance, even if it’s not a big company, shows how much you value your employees.
To make sure you attract the best and brightest talent for your small business, consider investing in health insurance. Studies indicate that health insurance plans increase employee loyalty and reduce turnover. In the Harris poll, 86% of workers said that getting universal medical benefits would affect them to choose one job over another job. Although the Affordable Care Act (or “Obamacare”) has taken some serious steps to improve personal, family and commercial health insurance, many misconceptions remain about it.
- Healthy employees are productive employees.
Employees who do not have health insurance are less likely to receive annual check-ups or see a doctor when they are ill. This ultimately leads to lower productivity as they become sicker and have to take more time out of work. By focusing on saving money at the expense of their health, these employees are hurting the bottom line.
- Access to job security as self-employed workers
If you are self-employed without employees, then health insurance is still a necessity. Health insurance helps you protect yourself, your money and business from potentially catastrophic diseases. Depending on the country you live in, you may or may not be eligible for small business health insurance. (We’ll talk about this a little bit.) However, regardless, you need to make sure you are covered, either with an individual health plan or a group health plan.
Small Business Health Insurance Cost
The cost of providing health insurance should be measured in dollars and on time. If you bear some premium costs, then you have to take this cost into account. There is also time to find a plan that meets your business needs, and educate your employees about plan options, and administrative tasks after preparing a plan.
- Monetary Costs
The cash cost of providing health insurance depends on the range of benefits you provide, who covers it (only employees or employees as well as dependants), as well as the percentage of premiums you will cover. If you are using an intermediary, PEO or other external service to find health insurance for you, you should also take their costs into account. As mentioned earlier, collective health insurance plans for small businesses will generally be easier than individual plans.
The best way to budget these costs is as a percentage of your salary or as a monthly fee per employee.
- Time Costs
Finding, analyzing and selecting the best health insurance plan takes a long time.
You will spend your time and energy searching online for service providers, filling out paperwork, talking to your employees about their needs, and consulting with other employers and small business health insurance experts. In addition, you should review your health insurance plan annually for open registration and make sure it is properly maintained on an ongoing basis.
Average cost of health insurance for small businesses
All this said, you may wonder more specifically what the average cost of health insurance looks like for small businesses. Due to all the factors we covered above, it is difficult to set a single number for the cost of health insurance, as it will eventually vary based on your company details.
However, according to research by the Kaiser Family Foundation, in 2018, the average employer premium for small businesses was $6,896 per worker. Employers contribute about 80 per cent of premiums, leaving employees to cover the remaining 20 per cent.
Therefore, while exploring your health insurance options, you can remember the cost of this average employer premium, given, of course, that your costs will continue to depend on the type of benefits you offer, what percentage of premiums you will cover, the provider of your choice, etc.