Business health plans and health insurance for small business
Many small businesses struggle with the rising cost of small business health insurance. Often it is one of the largest expenses they face each month. If the business has no employees, the small business health plan choices are pretty straight forward. An individual health plan or family health plan is all you need. But if you have more than one person working in a company then you may be looking to offer low cost small business health insurance as a benefit to your employees.
Small Business Health Plans (SBHPs) are also referred to as Association Health Plans and Group Health Insurance Plans. These group health insurance plans are categorized as either indemnity plans (also known as “traditional indemnity,” “fee-for-service,” or “FFS” plans) or managed care plans. The two plans differ in their approach to small business health insurance coverage such as the choice of providers, the out-of-pocket costs for covered services, and how bills are paid. With an Indemnity Health Plan, you will typically have a broader choice of doctors (including specialists, such as cardiologists and surgeons), hospitals, and other health care providers. Managed Care Plans will typically have less out-of-pocket costs and paperwork.
Indemnity plans are most common on the east coast and once dominated the American health insurance market. Managed care plans now take up a much larger share of the overall Small business health plan market. Managed care plans are especially dominant in the western parts of the country. The three basic types of managed care health plans are Preferred Provider Organizations (PPOs), Health Maintenance Organizations (HMOs), and Point of Sale (POS) plans.
Health insurance benefits are without a doubt one of the most valuable benefits you can offer your employees. Surveys have shown that workers value health insurance coverage second only to monetary compensation. By offering group health plan benefits to your employees, you may find it easier to hire and retain the best workers for your company.
As a small business owner, you may not have individual health insurance coverage for yourself. Perhaps you’ve considered shopping for an individual health insurance plan for yourself and your family, but weren’t pleased with the costs of such health plans. By obtaining health insurance for small business through a company, you may get better insurance rates than you would through the individual health plan market?
Additionally, there are various tax incentives available to you as a small business owner and to your employees as well when you participate in a group or small business health plan. For example, businesses can generally deduct 100% of the premiums they pay on qualifying small business group health plans. By offering group health insurance as part of a total compensation package, you may be able to reduce payroll taxes. Plus, your employees can pay their portion of the monthly insurance premium with pre-tax dollars. These are important incentives to keep in mind when determining the affordability of a small business health plan for you and your employees.
