Choosing the best health insurance for small business owners can be overwhelming. With so many options and factors to consider, it’s not easy to know where to start. Without a dedicated HR team, navigating the complexities of health insurance benefits—especially the annual process of evaluating and selecting the right plan—can be one of the most challenging HR tasks for small business owners.
Health insurance isn't just a requirement for some businesses; it’s a crucial tool that brings multiple benefits. Before we delve into the five expert tips for choosing the best health insurance for your small business, let’s take a closer look at why offering health coverage matters.
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When small businesses offer health insurance, they unlock a range of benefits that extend beyond just fulfilling legal requirements. Here are a few reasons why health insurance is an essential consideration for your business:
Deciding to offer health insurance to your employees is a significant step, but determining the best health insurance for your small business budget can feel overwhelming. With numerous options and considerations, it’s essential to approach this decision strategically.
Fortunately, selecting the right coverage isn’t a battle you have to face alone.
Here are five tips to help you choose the best health insurance for small business budgets, ensuring you provide valuable benefits while keeping costs manageable.
Group health insurance is typically the most cost-effective option for small businesses. While individual health plans may cover employees and their families, group coverage often provides more extensive benefits at a lower cost.
This is because the risk is spread across multiple policyholders within your company, making it a financially smart choice for both employers and employees.
Depending on your budget, you can decide whether to cover the entire premium or share costs with employees. According to the 2023 Kaiser Family Foundation Health Benefits Survey, workers in small firms contributed an average of 17% for single coverage and 38% for family coverage—highlighting the flexibility small businesses have in determining contribution levels.
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As a small business owner, offering the best health insurance for your small business doesn't just benefit your employees—it can also help you save money through tax credits.
If your company has fewer than 25 full-time employees and you cover at least 50% of your workers' premiums, you may qualify for valuable tax credits by purchasing a plan through the Affordable Care Act's Small Business Health Options Program (SHOP) marketplace. Each state runs its own version of the SHOP marketplace, making it an accessible option for small businesses across the country.
Even if your company doesn’t qualify for SHOP-specific tax credits, you may still benefit from purchasing health insurance through the ACA’s marketplace. Premium costs might be deductible as a business expense, reducing your overall financial burden while still offering comprehensive benefits to your team.
When selecting the best health insurance for small business budgets, it's crucial to look beyond the premium costs. While premiums depend on factors like the scope of coverage, whether you extend insurance to employees' families, and how much of the cost you share with your employees, other expenses should also be considered.
For instance, managing health insurance each year requires time and resources. This includes researching and evaluating different plans, implementing the chosen plan and maintaining the necessary systems for ongoing administration.
You may also need to invest in HR technology to help manage your benefits program efficiently.
Factoring in these additional costs ensures you’re selecting not only the best health insurance for your small business but also the most practical and sustainable option for the long term.
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Choosing the best health insurance for small business requires understanding the different types of managed care plans available. Small and medium-sized businesses typically offer one of five common plan types, each with its own advantages and cost structures.
These include:
The best health insurance plan for your business will depend on several factors, including:
Consulting with an experienced employee benefits expert can help you navigate these options and choose a plan that meets both your business’s needs and your employees’ expectations.
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For small and mid-sized businesses, accessing the best health insurance for small business can be challenging, especially when you don’t qualify for large-group plans. Smaller companies typically lack the same buying power as larger organizations, making it difficult to secure competitive rates and high-quality coverage.
This is where partnering with a professional employer organization (PEO) like Axcet HR Solutions can make a big difference.
A PEO pools its clients’ employees together, giving small businesses access to health insurance plans with better benefits and lower premiums—similar to those available to larger companies.
By acting as the employer of record for your workforce, a PEO spreads risk across a broader group, allowing your business to tap into more affordable healthcare options.
This means that, with a PEO, your small business can offer top-tier health insurance that aligns with your budget while remaining competitive in the job market.
At Axcet HR Solutions, we help small businesses access the best health insurance for their needs, offering cost-effective solutions that would otherwise be out of reach. Our comprehensive employee benefits services ensure you get the most value while simplifying your HR responsibilities.
Choosing the best health insurance for small business owners takes careful planning and effort, but it’s not a challenge you need to face alone. As a certified professional employer organization (PEO), Axcet HR Solutions simplifies the entire process, offering you access to better coverage rates typically reserved for larger companies.
We don’t just help you find the best health insurance for small business budgets—we also manage the ongoing administration of your employee benefits program, freeing up your time to focus on growing your business. Whether you need assistance with evaluating your options, staying compliant with ACA requirements, or reducing overall costs, Axcet is here to guide you every step of the way.
Ready to take employee benefits and other HR tasks off your plate? Schedule a consultation with our PEO health insurance and employee benefits experts today and let our team handle the details so you can focus on what matters most—running your business.
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