Small Business Health Insurance

Small business health insurance is an important part of owning a small business and provides health care benefits for those working within a small business. A business is eligible for small business health insurance if it employs anywhere between two and fifty employees.

What Are the Benefits of Small Business Health Insurance?

Having a health insurance plan for your small business is important for a number of reasons.
Employee satisfaction. Because of the rising costs associated with healthcare, health insurance is becoming a requirement for potential employees rather than an option. People are less likely to accept a position that does not offer some sort of health benefits. In addition, health benefits usually mean people are more likely to visit the doctor when necessary, so your employees are healthier and miss less work. By providing health insurance to your employees, you reduce the turnover rate and increase employee satisfaction, which in turn increases production and productivity.
Tax benefits. Generally speaking, employer contributions to a small business health insurance plan are usually 100 percent tax deductible, so you can write it off as a business expense. Employees also benefit tax-wise, as they save money on their payroll taxes.

What Does Small Business Health Insurance Entail?
Small business health insurance plans determine their rates based on a bulk rate for the group. The basic policy for the employees is the same, although in most cases employees can customize their policy to meet their needs (eg, one family may opt to subtract maternity coverage and go with optical instead.)

There are a number of different options available for small business health insurance plans. These include HMOs and PPOs, the most common, and POS and FFS plans as well. In addition, Medical Savings Accounts are also an option. Most small businesses opt for these managed care plans, as they are generally more affordable.

The costs of the health insurance premiums vary with each state and company. In addition, the total cost of the plan is based in part on the demographics of the employees in the plan, and such things taken into consideration include median age, current health status, tobacco usage, and location.

How to Determine Which Plan Is Right for My Business
When deciding on what type of health insurance to purchase for your small business, there are a number of factors to consider. These include:
Deductibles. Ask the insurance provider how much the deductibles will be, whether they are paid before or after the insurance begins, and how much employees can expect to pay.
Providers. Determine which doctors, hospitals, and specialists are included in the plan. In addition, it's important to determine whether there are enough providers in the area and if they are accessible to employees.
Network. Ask the provider whether or not those on the plan can use medical professionals outside the network. Many times, they allow this but at a significant cost.
Limits. Determine what limits, if any, are placed in the event of a major illness or accident that requires extended or expensive care.

Establishing a health insurance plan for your small business has a number of benefits, including tax breaks for you as an employer as well as increased productivity and satisfaction for your employees. As there are a number of health insurance programs available, it's important to take the costs and needs of your employees into consideration.