How to Choose a Health Insurance Plan for your Small Business
The Affordable Care Act (ACA) “employer mandate” says organizations with 50+ full-time equivalent employees must provide coverage to at least 95% of full-time employees and their dependents up to age 26. Larger employers must pay a fee for not offering health coverage. However, there’s no requirement that smaller businesses provide health insurance for employees. Nevertheless, many employers do offer health insurance because they know they’re competing for employee talent with others who include such coverage in their employee benefits program.
So, you may be wondering, how do you choose the best health insurance plan for your business? What should you consider in choosing a small business health plan? Below are some things to think about.
It’s important to find a health insurance solution that is flexible enough to work with your budget. A private health insurance exchange, like CaliforniaChoice, puts you in charge of what you spend with Defined Contribution. You decide what amount you want to put toward your employees’ coverage. You can choose a fixed dollar amount per employee or a fixed percentage toward the cost of coverage. You may qualify for an employer tax credit if you purchase group health coverage through the Covered California marketplace (the state’s public health insurance exchange). Or, when you buy coverage directly from a carrier or through a private health exchange, your contributions to the costs of employee and dependent health coverage are, generally speaking, 100% tax-deductible as business expenses on your state and federal taxes. Best of all, your premium costs are limited to the amount you choose. Your employees apply your generous contribution to the cost of the plan they prefer. If they select a plan that costs more than your contribution, they pay the difference. It’s that simple.
Coverage Options and Networks
Most important to your employees is probably that they can access their preferred health care providers – doctors, specialists, and hospitals – and prescription drugs, if they have ongoing health concerns like high blood pressure, diabetes, or similar conditions. A multi-carrier private exchange offers more employee choice than a single-carrier solution. For example, with CaliforniaChoice, one of your employees might choose a PPO from Anthem Blue Cross because of a particular doctor or hospital in their network, while another employee who rarely visits the doctor might choose an HMO from Kaiser Permanente. A third employee might choose an HSA-compatible HMO from UnitedHealthcare because of its cost and tax advantages. Whatever your employees’ needs may be, it’s their choice!
You want a program that’s easy to manage. A private exchange gives your employees access to multiple health plans but offers a single point of contact for answers to questions, a single website to manage your benefits online, and just one bill for all of your employees’ coverage each month. It doesn’t matter how many different health plans your employees enroll in, your one monthly bill shows all coverage, your contribution, and each employee’s contribution to the cost.
Help When You Need It
A group health insurance broker – who doesn’t charge you anything for his or her services – can make it easier for you to find the right health insurance solution for your small business. A broker can explain the benefits of each plan you’re considering, help you determine your monthly contribution to coverage, schedule enrollment meetings to help employees select their benefits, and answer any questions once your group coverage begins.
If you don’t already have a broker, we’ll help you find a local CaliforniaChoice broker to speak with about your employees’ health insurance needs.