Health Insurance Options for Small Businesses

Under the Affordable Care Act, small business owners with fewer than 50 full-time equivalent employees are not subject to employer mandate. Although they are not required to provide group plans, offering health coverage is a crucial part of recruiting and employee retention.

Here’s a list of health care benefit options for small businesses, startups, and non-profit organizations.

SHOP Marketplace. In the Marketplace, small businesses are given more options for their health care plan. The Affordable Care Act provides tax credits for eligible employers to help pay for coverage. This is available to employers with less than 25 full-time equivalent employees and has an average wage of less than $50,000 per employee annually.

Individual Health insurance. If you opt to give your employees an annual bonus, increase in compensation, or tax stipend, they can purchase health insurance on their own. Directing employees to individual health insurance allows them to choose the coverage that fits their needs and get access to premium tax credits.

Private Health Exchange. Private health insurance exchanges usually include two or more health insurance options, recommendation on what coverage best fit their needs, and automated billing.

Co-op. Another traditional approach is joining a co-op. The idea is that the co-op increases buying power thus spreading the risk to a larger group. This is structured differently and whether it offers better insurance rates than businesses could get on the open market often depends on local insurance-underwriting laws.

Group insurance plan. This is easy for employees to understand as the concept of employer-based health insurance isn’t new. The money that an employer spends on providing health insurance counts as tax deductible. But it doesn’t necessarily mean paying the whole cost of the premium. Employers usually pay 50-80% of the premium cost depending on particular circumstances.

Do you find it a bit complicated to compare and choose a health insurance plan? Work with an IBG agent today and we’ll help you find the best solution for your business.


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