By
Jeanette Coleman, SPHR & SHRM-SCP
on
Nov
25,
2019
5 min read
0 comment(s)
If your small business has fewer than 50 employees, the law in most states doesn’t require you to provide them with health insurance. Just because it’s not an obligation doesn’t mean you shouldn’t do it, though. Study after study demonstrates that access to employer-provided health benefits helps small businesses attract new employees and increases job satisfaction among the employees you already have.
If you have more than 50 full-time employees, the Affordable Care Act requires you to provide them with health insurance, and the Internal Revenue Service backs up that mandate by requiring that you submit proof of compliance annually.
Let’s assume for the purposes of this post that you’ve decided to provide your employees with health benefits. No single plan works for every small business, so how do you go about shopping for insurance that both meets your employees’ needs and doesn’t blow your budget?
How much you’ll pay monthly to the insurance company is usually the most important question to consider as you start the process of shopping for employee health benefits. Costs vary by company size, geographic location, whether you cover employees alone or include their dependents, the ages and health profiles of your workers and the scope of benefits offered.
You may choose to pay for health insurance in one of several ways:
After you’ve roughed out a budget, begin identifying potential providers who have small business expertise. Ask other small business owners for recommendations based on their experiences and look at online reviews for the providers you’re considering. A little homework up front can save you money, time and frustration down the road.
Providers come in several flavors:
Because insurance offerings can vary greatly depending on the state or city you’re in and the numbers of local providers competing for business, you may want to consider talking with more than one type of providers.
After you have narrowed the list – either by provider type or by individual companies – call or meet with the providers you’re considering to outline your small business insurance needs and learn about the products and services they offer. This step should be a give-and-take process. A provider may, for example, offer options you hadn’t considered but which might expand the health care benefits you provide employees without increasing costs. It’s best to approach these discussions having clarified your must-haves while being open to additional ideas and services the provider might bring as part of the package.
Ask about everything that matters to you and your employees, including:
When you’re comfortable that each provider you’ve met with understands your needs and budget, ask for rate quotes – but don’t base your provider choice on cost alone. If you don’t connect well with the representatives of a provider you’re talking to, chances are you won’t like working with them long term– even if they offer you the “best deal.” Look for a provider you can trust – someone who’s responsive, can communicate complex topics clearly, has locally-based representatives, and is a good cultural fit for your organization, in addition to being competitively priced.