Health Insurance for Small Businesses
October 12, 2022 | Tags:
As a small business owner, you may be exploring the option of providing healthcare benefits to your employees. Whether you're just starting to research health insurance options or are ready to get a quote, we can help.
Why Should You Provide Healthcare Benefits?
There are many advantages to providing employee benefits as a business owner:
- Retain quality employees – In today’s job market, offering benefits is becoming essential for recruiting and retaining top talent. According to a 2020 LinkedIn study, companies that rated highly on compensation and benefits saw 56% lower employee attrition overall.
- Keep your employees healthy and productive – Providing access to healthcare benefits can ensure your team stays healthy and happy, and in turn, provides quality work.
- Enjoy tax benefits – Like the wages and bonuses you pay your staff, certain employee benefits are tax deductible.
Use the information below and talk to your broker about what plan option is right for you.
Funding Types
There are two different funding types for health insurance plans:
- Fully insured
- Self-insured
Either funding option could work for you and your small business, depending on your comfort level with risk and the amount of premium you want to pay.
Let's compare the two types:
Fully insured
- Employer pays a premium to the insurance carrier, which assumes the financial risk.
- Premium rates are fixed for a year, based on the number of employees enrolled per month.
- Monthly premium only changes during the year if the number of enrolled employees changes.
- Insurance carrier collects premiums and pays healthcare claims based on the policy you purchase.
- Enrolled employees/covered dependents pay deductible amounts and/or copayments for covered services.
Self-insured
- Employer assumes the financial risk for providing healthcare benefits to its employees and pays the insurance carrier an administrative fee for processing the claims.
- Employer pays claims as they’re incurred instead of paying the insurance carrier a fixed premium.
- The two main costs are:
- Fixed - such as administration costs and stop-loss premiums
- Variable - based on how much the health plan is used
- To limit risk, employers can use stop-loss insurance, which reimburses the employer for claims that exceed a predetermined level. Stop-loss can cover:
- Claims that significantly exceed the expected level for the group
- Catastrophic claims
Plan Types
There are several options to consider when looking at plan types. Popular include:
- Preferred Provider Organization (PPO)
- Health Maintenance Organization (HMO)
- Point-of-Service (POS)
There are advantages to each plan type, and one may work better than another for you, your employees and your small business. Learn more about these different types of plans and contact a broker to determine which plan is best for your small business.
What Medical Mutual Can Offer You
Funding Types Offered by Medical Mutual
Medical Mutual offers a variety of health plan options to meet your specific needs, including fully insured and self-insured plan options. Our Affordable Care Act (ACA) Small Group plans offer a variety of plan options with competitive rates. Our self-insured options, Balanced Solutions and the COSE Benefit Plan provide alternatives to traditional plans.
Plan Options
Medical Mutual offers PPO and HMO options, as well as Health Savings Accounts (HSA) and Health Reimbursement Accounts (HRAs). We also offer dental, vision and life insurance coverage for small businesses. Learn more about these types of plans.
Next Steps
If you already have a trusted broker, call him or her to discuss your options. If you don’t have a broker yet, we can help you find a reputable one through our broker network. Call us at (440) 878-5930 or request a group quote to get started.