Providing employee health insurance is a team building exercise that helps consolidate employee loyalty, to be sure. But health insurance also provides significant health insurance tax advantages to small businesses themselves! That’s a benefit thousands of small businesses are taking advantage of right now, according to a recent article in Forbes. Shouldn’t your business be one of them? Right now is the right time to buy: Insurance providers are competing with one another for new customers, and that means the best deals for you.
Recent Changes In Health Insurance Options For Small Businesses
In the past, small businesses — defined as businesses with fewer than 100 employees — have paid as much as 18 percent higher than larger companies for the same employee health coverage, and that discouraged many of them from offering this benefit. But all that is changing under recently enacted health care legislation which will lower the cost of premiums in three critical ways:
1. Some 3.6 million small businesses are eligible to claim significant tax credits under the new health care reform bill.
2. The new laws put an end to insurance discrimination based on health status. This means a decrease in administrative costs overall and no more arbitrary premium hikes.
3. Small businesses will be able to join with other small businesses when they shop for health insurance, essentially increasing the size of their risk pools.
In essence, all insurance is a system of risk management: The higher the likelihood a particular risk has of happening, the costlier it will be to protect oneself from it. Smaller health insurance risk pools means there is a higher likelihood that a consumer who will make heavy use of that insurance; larger risk pools lessen that possibility.
Health insurance pools will also increase purchasing power and decrease administrative costs.
Types of Medical Insurance
There are three basic types of medical insurance: Blue Cross/Blue Shield Plans, Health Maintenance Organizations (HMOs) and Managed Care Plans.
• Blue Cross/Blue Shield Plans
The Blue Cross Blue Shield Association (BCBSA) is a consortium of U.S. health insurance providers, responsible for covering almost 100 million consumers in every state nationwide. While licensed by BCBSA, these insurance companies work independently of the consortium and each other, providing regional insurance under the BCBSA umbrella. Frequently, BCBSA providers will utilize provider networks to keep costs down.
• Health Maintenance Organizations (HMOs)
HMOs contract with specified health care providers like hospitals and physicians’ groups who have agreed to treat patients in accordance with HMO guidelines. Primary care physicians review utilization requests for medical services while case managers oversee the treatment of patients with chronic illnesses to ensure that the patient is receiving suitable treatment. By restricting access to contracted providers and appointing a gatekeeper to determine whether health care consumption is appropriate, HMOs are able to keep costs down – and those savings are passed on as lower premiums for you!
• Managed Care
Managed care is the umbrella term for a variety of health care delivery options that include preventive, primary, specialty and ancillary health care services. They keep down your costs by allowing you to select the most cost effective providers and giving them financial incentives to practice more efficient delivery of health care services.
One of the most common forms of managed care are Preferred Provider Organizations (PPOs.) Like HMOs, these are provider systems under contract to provide services, but they tend to offer patients freer access to services. Members, for example, may be able to use out-of-network providers although they may only be reimbursed for portion of the costs they incur under this plan.
How Does Employee Group Health Insurance Work?
As an employer, you review the group health insurance plans insurance providers have to offer, and pick the one that best suits your business’s needs, based on what you can afford and the types of coverage you think will best suit your workforce. Then you invite your employees to join.
Employers generally cover 50 percent or more of their employees’ premiums and may also fund, or partially fund, dependent coverage Employees pick up the remainder of their health premiums themselves.
The best way to find the group health insurance policy that’s right for your small business is to shop around, comparing quotes and coverage from as many different insurance companies as possible. It’s easy to do this online! These insurance companies know they’re competing with one another and since they all want your business, you’ll find some excellent deals this way.
How To Select the Right Employee Health Plan For Your Business
Cost is obviously the main criteria you will use in selecting your business health insurance package. But what should be some of your other considerations?
A familiar scenario for most employers is the employee who take a few hours off during the day to see his or her health care provider. The farther away that health care provider is, the longer your employee will be out of the office. It just makes sense to choose an employee health plan that gives workers access to nearby medical attention.
An ounce of prevention is worth a pound of cure – and costs considerably less to provide as well. Invest in the wellness of your employees by choosing a plan that offers them ways to improve their own health and they’ll take fewer days off from work.
3. Value Add-Ons For Valuable Workers
If you’re in a business whose revenues depend upon specialized skills and training, you know that some employees are harder to replace than others. You want to give your highly trained employees every incentive to stay on with you. Value add-on health benefits are one such incentive. If, on the other hand, employee churn does not present a problem for your business, a plan that offers basic coverage may be just what you need.
Whatever employee health plan you end up purchasing, there has never been a better time to shop for one than right now. Insurance companies are competing for your business. Your best strategy is to compare free insurance quotes from as many different online companies as possible and then choose the one that’s right for you. Get started right now and save money on business insurance and health!