Your employees are perhaps the most valuable asset of your small business.
Buying health insurance for your small business offers twofold benefits – maintains productivity and employee satisfaction, and retaining and recruiting employees.
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But have you ever wondered how much is health insurance for small businesses? Well, the answer depends on several different factors including the type of insurance coverage, number of employees, etc.
What Type of Coverage for Small Business Health Insurance?
The first thing worth mentioning is that small business with less than 50 employees are not required by laws in most states to have health insurance.
But as mentioned earlier, you should get health insurance as an employer even if you a single employee.
Starting a small business can be expensive, and it can be easy to skip health insurance to save a few bucks.
However, if your employees are covered, then you do not have to worry about their medical bills in case they get injured at the job site.
Healthcare insurance also covers your employees if they have any preexisting medical conditions, and may policies also cover employee’s families too.
You must have at least one employee on your company’s payroll to qualify for small business health insurance.
In some states, you can include yourself by stating that you are the owner and an employee.
How Much Does Health Insurance for Small Business Cost?
With regards to costs, small business owners are required to pay at least 50 percent of the monthly health insurance premiums for their employees.
For health insurance to be affordable, the annual cost to employees for their health insurance premiums should be no higher than 9.78 percent of their annual income.
You as an employer or small business owner can shop around for health insurance for your employees at any time, even if your current plant has not expired yet.
However, you are typically locked in for at least a year once you buy a small business health insurance plan.
You can also make certain adjustments during the course of your coverage after signing up such as adding new employees, dropping coverage for former employees, etc.
One of the hidden perks of small business health insurance for employees is group coverages cost less than buying individual health insurance and cover both employees and their dependents.
Small business health insurance may also qualify you for tax credits if you purchase a plan through an insurance portal created by the ACA or the Small Business Health Options Program (SHOP) Exchange.
To qualify, you must meet certain requirements including:
- Have less than 25 employees
- Offer health insurance to all full-time employees
- Pay at least 50 percent of the premium cost
- Pay salaries of less than $50,000 per full-time employee annually
The cost of small business health insurance depends on the type of insurance, benefits you wish to provide, and who you are covering, whether employees only or their dependents too.
You should also consider the time you will spend on finding the best health insurance for your employees because time is money.
To speed up the process and avoid wasting precious time, you should make a note of a few things before getting a quote such as your employee’s needs, and informing your employees about the various plan options available.
Employee premiums for healthcare insurance are usually deducted from their paychecks.
The costs of employee premiums are fixed and does not depend on how much they work or earn.
Then there are deductions called deductibles in insurance lingo.
Deductibles are the amount an employer has to pay before the employee’s healthcare benefits kick in.
The cost of deductibles can vary across companies and across states.
For example, deductibles for small business health insurance in Indiana could be 20 percent, so if your employer makes a $1000 claim, you as an employer will have to pay $200 upfront.
Small business health insurance is an added expense but is well worth it.
The cost of health insurance for small businesses will depend on several factors including the number of employees, and the type of coverage you opt for.