As a small business owner, you’re responsible for securing several different types of insurance for your company. Failure to obtain the proper insurance may mean you’re not able to launch a new business. If your business is already operating and you don’t obtain or maintain appropriate insurance coverage, you risk facing hefty fines or losing your business license.
Although it can be a very complex topic best discussed with a professional before you make any decisions, we’ve compiled a list of the basics you need to know about offering various kinds of health insurance to your small business’s employees.
Types of Small Business Health Insurance Plans
There are many kinds of insurance available to you as a small business owner. Protecting your business assets, your property, and your employees’ health and well-being are a few of the reasons why business insurance is important—and, in many cases, mandatory.
Legally Required Small Business Insurance Plans
There are several types of business insurance that are mandated by state law to protect yourself, your business, and your employees. Most states require small businesses to offer workers’ compensation, unemployment, and state disability insurance. Your state may also require insurance for specific business activities. Check with your state’s Department of Insurance or contact your local city government offices to learn more about your state’s mandatory insurance requirements for small businesses.
Required Health Insurance for Small Businesses with 50+ Full-Time Employees
The Affordable Care Act requires companies with 50+ full-time employees to offer affordable heath/medical insurance. Businesses with fewer than 50 full-time employees are not required to offer or provide coverage, but there are various options available if you’d still like to offer options to employees.
Optional Programs for Small Businesses
Many other programs are available for small businesses to develop their unique coverage for employees. Even if they’re not required by law, these insurance options can increase compensation value for your employees in competitive markets:
- Long-term care insurance
- Long-term disability insurance
- Life insurance
- Health Savings Accounts (HSAs)
- Health Reimbursement Arrangements (HRAs)
- Dental and vision insurance
- Voluntary programs
Advantages of Providing Your Employees with Health Insurance Coverage
Deciding to offer small business health insurance can be a big decision for any company, and you may have questions about why you might provide health coverage as one of your employee benefits. For example: offering health insurance helps your workers, but what are the benefits for the employer?
You may be surprised to learn that there are many ways that small business health insurance can help your company operate more strategically, efficiently, and effectively. Not only does a small business health insurance plan benefit employees, but employers might find that there are plenty of ways that a group plan helps them out as well, including:
Group Health Insurance Means Lower Rates & Premiums
On average, small business health insurance plans tend to have lower per-person costs compared to health coverage in the individual market. This means that enrolling in a group health insurance plan can not only be more affordable than individual insurance for employees and their families, but also for the business owner and their family. At Wealth Enhancement Group, we can assist businesses of all sizes in designing health, life, disability, and all ancillary lines of coverage at premium levels to suit your business.
Covering Your Small Business Employees Offers Tax Credits
Employers can generally deduct the cost of premiums and HSA contributions from their small business taxes. Offering health insurance coverage could also potentially mean reduced payroll taxes. Under the right circumstances, your company may even qualify for the small business health care tax credit established through the Affordable Care Act.
Increase Your Employees’ Compensation Through Coverage
Deciding to offer small business health insurance can serve as an essential part of an effective hiring and retainment strategy and can help a company stand out as an employer of choice. Talented employees consider benefit packages when making employment decisions, and most prospective hires want quality employee benefits such as group health insurance. Overall, small employers who offer health coverage may be better positioned to recruit the best talent and attract employees who can help their business thrive. Evaluating your business’ insurance offerings compared to local competitors or peers can help keep your compensation competitive.
Employee Health Insurance Costs for Small Businesses
The cost of a benefit package is unique to each group, as premiums are largely census driven. This means they’re based on the demographics of your group, so it’s hard to know how much it might cost without first speaking with a professional.
At Wealth Enhancement Group, we work with you to structure and develop employee benefits programs that complete the ultimate objective: an economically viable comprehensive employee benefits program tailored and balanced to satisfy employees’ and management’s needs.
How to Pick the Right Health Insurance for Your Employees
Employee benefits are becoming an increasingly substantial part of a company’s bottom line. Traditional cost containment strategies may not be effective for this long-term problem. With health care trends continuing to rise, many plans cannot absorb higher copays and fewer services. Many businesses have different needs, but often the common denominator is to offer a comprehensive program at the best cost. A simple Employee Benefit Assessment can assist in deciphering what the needs are and developing a plan design that suits those needs.
At Wealth Enhancement Group, we take pride in providing benefit solutions. We offer specialized advice in helping business owners and plan managers decide which plan or plans best suit their company’s specific needs.
Risk Management and Insurance
