How to Figure Out Which Small Business Health Insurance Plan is Best for Your Bottom Line
There are many financial challenges faced by businesses, but few of them are as complicated and difficult to understand as small business health insurance. This necessary part of owning a business can be a frustrating and stressful distraction from running your business. Making a poor decision about the health insurance plan can be time consuming, expensive and dangerous for your business. There are some simple steps you can take to find the right health insurance plan for your business and your employees.
Choosing a Broker
While it is possible to access health insurance marketplaces without the help of a broker, many businesses choose to hire someone to provide them with help. Brokers navigate paperwork and make sure your business is in compliance with laws. They will also help with implementations and renewals if necessary. The extra cost of a broker has the potential to save your business money by making sure you have the right kind of small business health insurance.
If you have ever applied for a small business loan you’ll be familiar with the documents and information necessary to make acquiring health insurance go quickly. Basic business information including your name, address, tax identification number and start date are required. A list of employees to be covered and a census of their names, ages, locations of residence and number of dependents will also be required. This will be used by the insurance company to determine premiums based on your employees’ risk levels.
Many business owners use one of two methods to determine how much they can spend on the benefit of small business health insurance. The first method uses a percentage of payroll. The cost of insurance correlates with the number of employees in a business. How much you pay your employees correlates with how much you want to keep them. Choosing a percentage of payroll expenses is used to assess cost versus benefit for many employers.
Others look at the cost of health insurance per employee on a monthly basis. This method is similar to the first, yet it looks at how much a business can afford to pay per employee, versus considering a percentage of payroll .The similarity demonstrates that the costs of health insurance will be the same no matter how you budget for them.
Businesses with between two and 50 full time employees do not have to purchase small business health insurance. For many, it is a wise decision in maintaining their talented employees. The above steps will help you determine exactly how much coverage you need and can afford. Once you have done that, contact health insurance companies that specialize in small businesses. They will have applications, package descriptions and reviews for you to consider before making your choice.