#smallbusinessweek Small Business Health Insurance
By Amad Ebrahimi
If you are a business owner with limited time, thinking about adding health insurance options for your employees might seem like a daunting task. In today’s competitive job market, employees are looking for security and support, and when it comes to what job seekers want, health insurance rates are second only to salary. Health insurance doesn’t need to be complicated. Here’s how to provide health insurance for your employees in five easy steps.
Step 1: Set A Budget
Before you make any decisions, know how much money you will allot to insurance. Take a look at your business’s budget and ask: How much will I contribute per employee? How much will I ask my employees to cover for themselves?
Choose a plan that offers good coverage to your employees, but also fits within your business’s budget. It’s crucial to know what you are paying for or what you might be asking your employees to pay for. The biggest factors in health insurance costs are:
- Medical history
- Prescription drug coverage
- Visits per year
- Types of specialists, if any
- Specific employee medical needs and history
Step 2: Know What Plan & Benefits You Need
Now that you know how much you can spend, study which plan fits within your budget and will provide the benefits you’re looking for. Ask yourself these questions to help pinpoint the right health insurance plan and level of coverage for your small business:
- How many employees do I need coverage for?
- How old are all my employees? How many of them are smokers?
- Am I going to add ancillary options to the insurance plan? (Vision or dental? What are you willing to pay for prescription drugs? Do you want to offer a wellness program?)
- How much of my employee’s premiums am I going to pay? (For tax credits, you will need to cover at least 50% of the premium coverage.)
- Will I also offer insurance to dependents/part-time employees?
- Do I want to offer my employees a Preferred Provider Plan (PPO) or a Health Maintenance Organization (HMO)?
These are the types of questions you’ll need to have answers prepared for when you go into your first meeting with an insurance agent or broker.
Step 3: Gather The Proper Documents
To receive an accurate health insurance quote from an insurance broker, you’ll need to provide some numbers and documentation. Before you call an agent or a broker, make sure you have gathered and prepared the proper documents. You’ll need to provide:
- Your business address
- The number of employees you are insuring
- Employee ages, zip codes, number of dependents
- Employees’ tobacco use (sometimes)
- Business Name
- Tax ID
Step 4: Start Shopping
Now you are ready to make purchasing decisions! If you run a small business with fewer than 50 employees, you may be eligible to enroll in the Small Business Health Options Program (SHOP). If you aren’t, decide if you want to choose the broker approach or head out on your own. When evaluating providers, here are some things to consider:
- The financial strength of the provider
- Customer service ratings for the provider
- Claims service ratings
- Policy offerings and coverage benefits
- Provider choices
A simple Google search can lead you to many online insurance providers that will sell to you and your business directly.
Step 5: Compare Quotes
Study the numbers and look at the plans. Maybe the cheapest plan is appealing, but does it actually work for your employees? Don’t be afraid to ask questions and pose several medical situations to understand the costs associated with them. Push for numbers, run scenarios, and compare, compare, compare.
Amad Ebrahimi is an entrepreneur, business owner and founder of Merchant Maverick, a highly successful business and financial review site which has helped over 1 million business grow since 2009.