With groups such as small businesses, the insurer has determined a premium price based on risk factors balanced over the entire group, using general information on members of the group, such as age or gender. Small businesses often pay more for employee health benefits because they don't have the buying power of big employers. On average, small businesses paid about eight to 18 percent more than large firms for the same health insurance policy. States most often review or approve policies that are offered directly to consumers or to small employers.
What if you have a very small business? So why do these small-business owners go to the trouble of setting up small-group coverage?
Attracting a talented workforce Offering health benefits has been one of the ways historically that businesses of all sizes have attracted and retained talented workforces. Employees are drawn to businesses that offer health benefits. The same survey also noted that 60 percent of workers reported they would work longer in order to keep receiving employer-sponsored benefits — and also revealed that most employees would actually stay with an employer longer to hold on to health benefits.
It almost goes without saying, then, that if you can afford to offer coverage, it will help your small business stand out from other businesses that are competing for your employees. Tax incentives At the same time, dedicating funds to employee coverage could be less expensive than simply using the same money to provide higher wages.
Health insurance is a form of compensation, but payroll and income taxes are not assessed — on you or your employees — on money that employers use to purchase health insurance and in most cases, taxes are also not assessed on the portion of premiums that employees pay.
In contrast, if you were to not offer coverage and instead give your employees a raise equal to the amount you were paying in health insurance, payroll taxes and income tax withholdings would apply. This makes group health insurance an attractive way to optimize compensation while minimizing the tax hit for both employers and employees.
For perspective, a Kaiser Family Foundation survey found that across firms of all sizes, employers pay roughly 71 percent of total family premiums for their employees, leaving the employees to pay just 29 percent of the cost.
Healthier, happier employees Subsidizing health coverage is a logical step toward improving the health of employees, who may be more likely to embrace preventive screenings and care. It also stands to reason that healthier — and insured — employees are less likely to be burdened by financial stress.
Those positive effects, in turn, are likely to boost attendance and productivity and — hello! Look at the costs now. The first step is getting a realistic picture of how much it would cost, by obtaining a variety of premium quotes for your group. From there, ask yourself whether you can afford the coverage.
But also consider future coverage costs. Will you still be able to afford to offer coverage as premiums rise with time?
Keep in mind that there are cost-saving measures available, including switching plans, increasing out-of-pocket costs, or requiring employees to pay a larger share of their premiums.
Check up on your competition. Do other similarly sized employers in your industry tend to offer coverage? If they do, you may need to offer coverage in order to remain competitive. Get feedback from your employees. HR leaders at large organizations routinely survey their employees to determine their level of satisfaction with their overall benefits package.
This includes an understanding of how the family glitch works. The cost to add family members to the plan is not taken into consideration. A few more small-group pluses 1. Use our tool to get a small-group coverage quote.
Regardless of where you get the plan, all new small-group plans effective since January are compliant with the ACA.Insurance for your small business Small businesses can use pfmlures.com as a resource for information on Small Business Health Options Program (SHOP) plans. How to Enroll Check Eligibility.
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the .
Small Business Health Insurance for All of Texas including Dallas, Denton, Frisco, Grapevine, Mckinney, and Plano. Click here for your free quote todayLocation: Old Shepard Place Suite #, Plano, , TX.
Learn more from WebMD about the impact of the Affordable Care Act on small businesses, including how small businesses can use the insurance Marketplace to look for health plans for their workers.
An ACA exchange is a government run marketplace of health insurance plans. Both off and on-exchange health plans in the individual and small group markets must satisfy Essential Health Benefits coverage requirements and utilize one of the metal plan designs for medical out of pocket costs.
Cigna HealthCare of Texas, Inc. is the company name for Cigna’s HMO health insurance products sold to Texas residents. Cigna is a global health insurance company with around 90 million customers.
The company has dedicated itself to the health, well-being, and security of its customers.