Group Coverage Is Better for Employees
An individual health plan offers coverage just for yourself or for your family. small business health insurance arizona has certain advantages over an individual health plan.
Group coverage is insurance that businesses purchase and offer to eligible employees and their dependents. Although group plans usually need to have at least two members, some states allow “groups of one” as well, so check out your local rules to make the best choice.
The insurance company will gather some basic demographic information about the group members– like age, geography, and so on– before explaining your plan options.
Usually, group health coverage is more affordable for employeesand offers more extensive coverage. You can split the premiums with employees or cover the entire premium, depending on your budget.
The traditional choice of most businesses, a group health insurance policy is a plan chosen by the business that provides coverage to employees and, potentially, employees’ dependents.
Small businesses offering group health insurance pay a fixed premium for the policy, though they may pass on a portion of the premium cost to employees. Employees are responsible for copays and deductibles associated with the services they seek.
Businesses typically purchase coverage through an insurance broker or the public Small Business Health Options (SHOP) marketplaces.
Traditional group health insurance can be a good choice for small businesses because it’s relatively easy to obtain and most employees are already familiar with how it works.
However, premium prices can be a challenge. The cost of traditional group health insurance is estimated to reach $13,363 per employee family in 2019 for businesses with fewer than 500 employees, according to Mercer’s National Survey on Benefit Trends. This is out of reach for many small businesses.
SHOP, or the Small Business Health Options Program, is a part of the Affordable Care Act.
Each state runs its own SHOP marketplace– either on its own or with help from the federal government– that you can use to search through, learn about, and select the best healthcare options for your small business.
Here’s the rundown:
If you have between 1 and 50 employees (or up to 100 in Virginia), you’re eligible to select healthcare coverage plans from your state’s SHOP marketplace. You can filter through our different levels of plans– Bronze, Silver, Gold, and Platinum– that indicates their prices (not their quality). Once you pick your “Metal level,” your employees can go into the marketplace and pick whichever plan that works best for them in your category.
You’ll rest assured knowing your expenses will remain the same no matter the specific plan, your employees will appreciate being able to choose their insurance plan, and your business might even benefit from a substantial tax credit. If you have 25 or fewer employees, you should investigate this possibility– it might save you quite a bit of money on your health insurance.