If you own a growing small business, you’ve probably asked yourself whether it’s time to start offering health insurance to your employees. The truth is, there’s no magic number of employees or specific revenue milestone that tells you it’s time. Instead, look at what’s happening in your business.
Are you having trouble recruiting? Losing good employees? Adding more structure to your HR processes? Seeing more predictable revenue?
These can all be signs that your business is ready to take the next step and offer employee health benefits. Here are five signs to watch for.
5 Signs Your Business Is Ready to Offer Health Insurance
1. Health Benefits Are Becoming a Factor in Hiring and Retention
If you’re having trouble attracting qualified candidates, or losing good employees to companies that offer health insurance, your benefits package may be holding you back. Pay attention to what candidates and employees are telling you. If health benefits come up when candidates turn down job offers or employees leave, that’s a clear signal for you.
The importance of health benefits is something you shouldn’t ignore. According to PeopleKeep, 81% of employees say a benefits package is a top factor when accepting a job. For a small business competing with larger employers, offering health insurance can help level the playing field.
2. You’re Paying More for Your Own Health Insurance
Many small-business owners purchase health insurance for themselves and their families. If you’ve been doing that through the Affordable Care Act individual health insurance marketplace or another source, you’ve probably seen how quickly premiums can change. That may have you thinking about a different approach — not just for yourself, but for your employees.
Offering a small business group health plan can give your employees access to employer-sponsored coverage while giving you another way to structure your own health benefits. Depending on your situation, a group plan may also provide tax advantages. Your broker can help you understand how those may apply to your business.
3. You’re Growing and Hiring Competition Is Getting Tougher
There’s a point in many small businesses when hiring starts to feel very different. Maybe you have five employees instead of two. Or you’re approaching 10 employees and competing for talent with larger companies that offer comprehensive benefits. At that point, not offering health insurance can become a bigger disadvantage. Of course, cost is a legitimate concern. But waiting also has a cost if you’re struggling to fill positions or retain the employees you’ve worked hard to hire.
A Defined Contribution health plan can give small businesses more control over their health insurance budget. With CaliforniaChoice, you determine how much you want to contribute toward employee health insurance premiums. Employees then apply that contribution toward the coverage they like best. If they select coverage that costs more than your contribution, they pay the difference. You can also revisit your contribution strategy at renewal.
You control the contribution. Employees get more choice.
4. Your Revenue Has Been Steady for Several Quarters
You don’t necessarily need exponential growth before offering employee health benefits. A more useful question is whether your revenue and cash flow have become predictable enough to support a recurring monthly expense. Health insurance is an ongoing commitment, so financial predictability matters.
If your business has maintained steady revenue for several quarters, it may be a good time to explore what employee health benefits would look like within your budget. CaliforniaChoice also provides a 12-month rate lock, giving you and your employees greater predictability during the plan year. That can make it easier to budget for health insurance without worrying about a mid-year rate increase.
5. You’re Adding More Structure to Your Business
As a small business grows, HR tends to become more formal. Perhaps you’re implementing your first payroll or HR platform. Creating an employee handbook. Hiring your first HR professional. Or moving workers from 1099 arrangements to W-2 employment. These are all signs that your business is becoming more structured, and employee benefits can be a natural next step.
Offering health insurance can help you compete with larger employers and demonstrate that you’re investing in your employees. It can also be part of building a more complete compensation package as your business grows.
What Can Small Businesses Offer Through CaliforniaChoice?
If you’ve decided it’s time to explore health insurance for your small business, CaliforniaChoice gives you a different way to approach employee benefits. Instead of choosing one health plan for everyone, CaliforniaChoice is an employee-choice program that brings multiple health plans and coverage options together. Your employees can choose from HMO, PPO, and HSA-qualified plans, depending on the options you elect to make available to your group.
Today, CaliforniaChoice offers access to 100+ coverage options from participating health plans, including:
- Anthem Blue Cross
- Health Net (coverage available through 2027)
- Kaiser Permanente
- Sharp Health Plan
- Sutter Health Plan
- UnitedHealthcare
- Western Health Advantage
Available health plans vary based on where your business and employees are located. Four participating health plans operate statewide, while three are regional. That means you can give employees more opportunities to find coverage that fits their individual or family needs without having to manage a separate health plan for every employee.
How Much Does It Cost to Offer Health Insurance?
One of the biggest questions small-business owners have about offering health insurance is simple: How much is this going to cost my business?
With CaliforniaChoice, you decide how much to contribute toward employee premiums. An employee can then apply your contribution toward the health plan they prefer. If they select a plan that costs more than your contribution, they pay the difference. That gives you a way to establish a benefits budget while still giving employees meaningful choices. And because you can revisit your contribution at renewal, your strategy can evolve as your business changes.
Dental, Vision, and Other Benefits You Can Add
A competitive employee benefits package can include more than health insurance. CaliforniaChoice also offers access to ancillary coverage and additional resources that can add value for your employees, including:
- Dental, Vision, Chiropractic and Acupuncture, and Life/AD&D coverage
- Premium Only Plan (POP) setup
- Flexible Spending Account (FSA) for groups with 15 or more employees
- Cal-COBRA participant invoicing, premium collection, and remittance
- California Rx Card, which can provide prescription savings of up to 80% on eligible medications
- Cal Perks, with savings on entertainment, theme and water parks, sporting events, museums, movies, travel, and more
- ChooseHealthy™, including fitness center memberships for $28 per month plus additional wellness savings
- Discounted pet insurance from MetLife and Spot
- Hearing savings through EPIC Hearing Service Plan
These extras can help you offer a more complete benefits package without having to build every benefit from scratch.
Is It Time to Offer Health Insurance?
You don’t have to wait until you have 50 employees, hit a certain revenue number, or feel like you’ve “made it” as a business.
If you’re struggling to compete for talent, your business has steady revenue, you’re adding more structure to your HR operations, or you’re simply ready to invest more in your employees, it may be time to explore small business health insurance. The right benefits strategy can help you compete for talent, support your employees, and give you more control over your benefits budget.
How to Get a Small Business Health Insurance Quote
The best way to understand what employee health benefits could look like for your business is to get a personalized quote and explore your options. A broker can walk you through available plans, costs, contribution strategies, and eligibility requirements with no obligation to enroll.
Ready to see what’s possible? Find a CaliforniaChoice broker and start the conversation.
