What is small business health insurance and what does it cover?


Many small business health insurance policies provide affordable coverage for your employees while ensuring their needs are covered. For example, the employer can cover some rates for small business health insurance up to 84%. So, if you find a quality small business health insurance company, you can get comprehensive coverage.

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UPDATED: 2022-09-06T19:15:50.471Z
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Small business owners looking at health insurance options.

As a small business, you want to ensure that your employees don't have to worry about their health insurance needs. With a comprehensive small business health insurance policy, you can ensure that your employees and their loved ones are cared for no matter what.

While you're researching quotes for small business health insurance, enter your ZIP code into our free quote tool to see what your employees could pay for a policy.

What is small business employer health insurance?

Small business health insurance options give employees healthcare to keep working to the best of their ability. Employee insurance through health care for small businesses can help ensure that your employees are happy.

Business health insurance is when the owner of the small business pays into a group health insurance policy. You can opt-in to this coverage, which will help save on your various medical bills.

Group life insurance, as it's often called, is usually more affordable than private health insurance.

When a company buys coverage for its employees, the insurance company will underwrite the group instead of each person individually. This can be an excellent way for people in higher-risk categories to save on insurance premiums.

Where can I find group health insurance for small businesses?

If you're looking for health insurance for small businesses, you probably have some employees you want to take care of. Luckily, there are a few options available to you as an employer to provide coverage to your employees.

You can help pay for your employee's insurance with programs such as:

  • Health Reimbursement Arrangements - Through Healthcare.gov, you can enroll in a program that covers premiums and other medical expenses for your employees.
  • Traditional group insurance - With these policies, the employer pays into a policy, and the insurance company underwrites the group of employees as a whole, providing more affordable coverage.

As with most insurance plans, there are different options for coverage. Ultimately it will be up to the employer to decide what kind of costs and deductibles employees will be responsible for.

How do I find health insurance for small business owners?

If you need small business group health insurance, you may want to consider starting with some of the top insurers in the industry. In addition, many companies will offer insurance for small business owners to help them protect their staff.

According to Healthcare.gov, you can also get more affordable small business health insurance through their HRA programs. This employer program pays for your premiums at an outside insurer or Medicare tax-free.

If you want a traditional group insurance plan, there are multiple ways to find a quality insurer. For starters, you can try:

  • Asking other business owners for recommendations
  • Online research considering local insurers
  • Get in touch with a financial advisor who can help you understand the terms

Most insurers will be willing to give you a group insurance policy if it means they can make a profit. However, it's more important to ensure that the company you're joining can take care of your employees' healthcare needs.

What type of small business health insurance do I need?

The choice of what kind of insurance policy you need will likely depend on your employees and their various needs. That being said, traditional group life insurance breaks down into plan types similar to private health insurance.

Some examples of these types of small business health insurance plans include:

  • Health Maintenance Organization (HMO)- HMO plans will give affordable coverage with low out-of-pocket costs but must be in-network.
  • Preferred Provider Organization (PPO)- Premiums are higher, but you typically get a more extensive network of providers to choose from.
  • Point of Service Plan (POS)- POS contains features from both the previous plans, acting as a mid-range policy type.

With these different insurance types, the employer gets to decide how to best provide for their employees. For example, while an HMO gives lower costs, it may restrict any doctors that your employees may enjoy seeing. On the other hand, a PPO plan might get expensive when going on multiple visits.

How can I find a good insurance company for my small business?

If you're researching group insurance companies for your small business, you should ensure that the company can take care of your staff. Before you sign on the dotted line for the policy, you should verify:

  • The insurer has the assets to pay
  • There aren't too many unresolved complaints
  • The company has decent credit ratings

Various services evaluate insurance companies from a financial perspective, with others examining how they treat their customers. Because the insurance company will play such a significant role in your employees' lives, you'll want to make sure it will treat them properly.

What are the small business health insurance costs?

While health insurance for small business owners might be a little pricy, it's nothing compared to the well-being of your employees. The truth is that you can still get affordable company health insurance as long as you shop wisely.

According to the 2020 Kaiser Family Foundation report, employees can expect to pay 16% of premiums for single coverage and 33% for family coverage. This makes the price considerably more affordable, as the company takes on well over half the cost of the premiums in the policy.

Some group insurance companies offer discounts that users can claim, such as allowing fitness trackers to help save on health insurance premiums.

How do I know if I need small business insurance?

According to the Affordable Care Act, employers with over 50 employees must offer some form of affordable group health insurance. Otherwise, they risk paying a fine due to their negligence.

Therefore, if your business has 50 or more employees, you must provide them with health insurance coverage.

But having a smaller business doesn't exclude you from getting health insurance for your employees. If you still want to provide group health insurance for your employees, it will show them that you care about their health and well-being.

What is your company size?

If your business has between 2 and 49 employees, you're legally considered a small business, whether you are an LLC, sole proprietorship, or S-Corp. Small businesses aren't required to get group health insurance. However, according to the same Kaiser report, 56% of employers offer group health insurance.

Small Business Health Insurance: The Bottom Line

If you're a small business that needs health insurance for its employees, you can likely find many options. Through the Affordable Care Act's HRAs or affordable small business health insurance, you can get coverage for most of your employee's health needs.

Do you want to buy small business health insurance? Enter your ZIP code into our free quote tool to see what you could pay for group insurance.

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