The cost of healthcare has been rising at an alarming rate. These price increases are not only impacting individuals, but also companies who provide health insurance to their workers. The average annual premium has increased by more than $1,000 in recent years according to the Kaiser Family Foundation. This increase comes as employers are struggling with high unemployment rates and stagnant wages, which makes paying higher premiums even harder on individuals and small business owners.
Many small businesses have stopped offering health benefits because of unsustainable costs and the one-size-fits-all nature of traditional group benefits. While doing away with group health coverage and similar benefits may seem like it saves money, it can wind up hurting your business. Small and medium-sized businesses are and will continue competing for employees, and the companies offering health benefits will be a more attractive option to potential new hires.
If you have less than 50 employees, you're not required under the employer mandate of the Affordable Care Act to offer affordable health insurance to your staff. With that said, you may lose some of your current employees to competitors who do offer benefits, so it's worth looking into offering group health coverage options that are affordable for both your business and your employees.
Small Business Health Insurance Options
When it comes to offering healthcare to your employees, you have three main options to choose from. Within these main options are numerous sub-options to consider.
No Coverage
If you're a small business, you technically don't have to offer any benefits at all. As mentioned previously, though, there are many reasons to offer health insurance, such as keeping your employees happy and healthy, retaining your current staff, and recruiting more talent.
In the event you don't offer health insurance through your company, your employee will need to purchase their own health insurance. Anyone can apply, and no one can be declined because of pre-existing conditions.
Assisting with Coverage
Even if you don't offer your employees health coverage, there are other ways to help your employees with their health care needs.
A self-insured health plan is the most common type of Section 105 plan. These plans can also be found in the form of HRAs and health reimbursement plans. The Section 105 plan is an alternative for small employers that allows for a deduction without having to recognize income to an employee.
If you want to set up a healthcare allowance for your employees to use on their individual premiums, you can set up a Healthcare Reimbursement Plan (HRP). This is a good option because it allows your employees to choose from a wide range of plans, options, and providers based on their needs.
Providing Group Health Insurance
Group health insurance plans are a way for employers to share the cost of coverage with employees, and their dependents (if applicable). With this option, you as the business owner, select the plan or plans your employees can take part in.
The most common types of group health insurance include:
Health Maintenance Organization (HMO) - A type of managed care that provides medical services through networks of providers who contract with an insurer to provide specified benefits at prearranged prices. The provider network is usually limited in size so as not to overburden it with too many patients.
Preferred Provider Organizations (PPO) - Similar to an HMO except that there is no requirement that all members stay within the network. Instead, employees may choose any physician whether they're in-network or not, though there are benefits to staying within the network when possible (such as lower copays).
High Deductible Health Plans (HDHP) - An HDHP has higher deductibles, but allows for lower premiums. This can save money on the monthly costs, but it means each employee will have to pay more out of pocket before the benefits of the plan are realized. HDHPs can be combined with options such as a health savings account (HSA), which allows employees to contribute to an account (tax-free) that can be used to cover medical expenses as needed.
Which Option is Best for Your Business?
As outlined above, you have several options when it comes to offering your employees health insurance benefits. The options outlined are by no means the only choices available, so it can be a bit overwhelming deciding what options are best for your business and employees.
Fortunately, you don't have to make the decision on your own. If you're a small business owner looking for group health insurance with medical benefits for employees in New Braunfels or San Antonio TX, contact 19:21 Consultants today to discuss your situation. We'll work with you to craft the perfect offering that works for your unique needs so that you can offer group health insurance and employee benefits that make everyone happy! Contact us today, we'd love to hear from you.