Business owners in this day and age are starting to wake up to the fact that health insurance is a necessary business expense.
By Ashley Lipman
Not only does it produce happier, healthier employees, but it’s a great way to retain top talent and attract the best possible candidates. Unfortunately, there are still a lot of myths and misconceptions surrounding small business health insurance.
It’s time to separate fact from fiction once and for all. Do you know what’s real and what’s nonsense when it comes to small business health insurance? The reality might just surprise you. In this guide, we’ll share 6 things you need to know about health insurance while debunking myths along the way.
1. Some Small Businesses Have to Provide Insurance
Since the individual health mandate has recently been disbanded, there’s a lot of confusion about how this affects small businesses. Basically, individuals will no longer face a fine during tax filing season if they opt not to purchase insurance through their employer or otherwise. However, the employee mandate is still in effect.
If you have 50 or more full-time employees you’re required to:
- Provide a qualified health plan to employees who are eligible
- Provide defendant benefits to family members of eligible employees
- Ensure the health plan is affordable
2. Self-Employed Workers Can Purchase Group Insurance
As a self-employed worker, you probably didn’t know you could get a group insurance plan. In fact, this mostly has to do with what your state defines as a “group.” A number of states will allow you to purchase a group health insurance plan even if you’re just in business with yourself and you have no employees.
If you have at least one employee, you’ll have even more options for buying group insurance. Finding group health insurance for self-employed workers doesn’t have to be complicated.
3. You Don’t Have to Offer Equal Benefits
There’s a common myth that you have to offer equal health benefits to all employees, but this is simply not true. If you’re bound to offer insurance under the employee mandate, you do have to offer a plan that suits the above requirements, but you can base your benefits on a number of things. For instance, many companies will base benefits on length of service, full- or part-time status, and exempt/nonexempt status. This can help you stay competitive for certain positions.
4. Employers Must Cover at Least 50% of the Premium
Another common misconception is just how much employers need to cover when it comes to employee premiums for traditional group coverage. The Affordable Care Act (ACA) actually doesn’t specify how much employees need to contribute, but most states require this percentage to be at least 50%.
Employers often choose to cover more of the employee premium in order to create a competitive benefits strategy. In 2017, the average employer contribution was 82% for individual employees without family coverage.
5. You Don’t Have to Wait for Open Enrollment
The open enrollment period changes depending on the state, but it’s generally between the months of November and December. However, open enrollment is only for individual plans and Medicare. You can offer health insurance to your employees at any time throughout the year. For most insurance companies, coverage will start on either the first or the fifteenth of the month.
6. You Can Meet Your Employees Needs
One of the biggest concerns holding employers back from providing coverage is the believe their team has too many different health needs. How can one employer possibly meet all of these needs with a single plan or provider? This is one of the biggest benefits of recently online insurance exchanges like the SHOP Marketplace. With this platform, your employees are able to choose a plan that suits their own needs and budget.
The key takeaway from this guide is that it doesn’t have to be confusing, complicated, or expensive to provide health insurance to your employees. Even as a small business, you have more options than you think to customize your own expenses and provide the right coverage.
These are all things you, as a business owner, should know about your own health insurance. Even if you’re not required to provide coverage, it’s well-worth offering benefits for your team.
Ashley Lipman is a content marketing specialist and an award-winning writer who discovered her passion in providing creative solutions for building brands online. Since her first high school award in Creative Writing, she continues to deliver awesome content through various niches.