Small business is big business. In fact, the majority of businesses in the U.S. are small businesses. Businesses with under 500 employees account for 99.7% of the workforce. This means most people rely on small. Firms with under 20 workers makes up 89% of all businesses in the U.S.
This means a huge portion of the U.S. population is relying on small businesses for health insurance. According to the NFIB Research Foundation, more than half of the 20,000 respondents named the cost of health insurance as a critical problem. This just goes to show that the rising cost of health care isn’t an individual problem, it’s actually a business problem.
Unfortunately, a lot of small businesses today feel like they don’t have any options when it comes to health insurance. The good news is our health insurance landscape is changing. It’s becoming easier than ever for businesses to navigate this brave new world of healthcare, and they can now offer the right care to their employees. Here are the top 5 small business health insurance options in 2019.
1. Traditional Group Health Insurance
The easiest and most well-known option is group health insurance. A group health insurance policy is chosen by the business to provide coverage to employees and their dependents. When a small business offers group health insurance, they pay a fixed premium for the policy and pass on the rest of the cost to the employee.
Where can you find group health insurance options? You can find these through an insurance broker or a health insurance marketplace. You never know what options you might find in just a few clicks.
2. Qualified Small Employer Health Reimbursement Arrangement
This might sound like a mouthful, but the qualified small employer health reimbursement arrangement (QSEHRA) is a great option for many small businesses. Created by legislation passed in December 2016, if you have under 50 employees you can offer a tax-free monthly allowance towards employees’ medical expenses.
This is a flexible option since you’re able to set the allowance for yourself per-employee. Employees are then allowed to purchase their own health insurance with this money or pay out-of-pocket for services.
3. High Deductible Health Plans
Because traditional coverage has a high cost in most cases for small businesses, many small businesses choose a high deductible health policy. With a high deductible health plans (HDHPs), you’ll pay less for less coverage.
How do you make up the difference in coverage? Because high deductible plans usually only cover very expensive emergencies, many small businesses also choose a group coverage health reimbursement arrangement (HRA). Similar to QSEHRA, with an HRA, you offer tax-free money in addition to the group policy.
4. Self-Insured Small Businesses
Another option for small businesses is to self-insure. Instead of going through a third-party for health insurance, the business itself assumes responsibility and financial risk for employees’ health care benefits.
While this might seem risky, it can be a good choice for small businesses who set clear restrictions through a third-party administrator. In this situation, the business pays out-of-pocket for each employee healthcare claim.
5. Multiple Employer Welfare Arrangement
Because group insurance can be expensive for small businesses with only a few employees, sometimes small businesses will band together to get more purchase power. This is often called a multiple employer welfare arrangement or association health plan.
With these arrangements, small businesses can take advantage of economies of scale. Even associations with as little as two employers can form a large enough employee pool to snag better deals on coverage. Restrictions have recently been loosened on these arrangements so now’s the time to find the right group for you.
Providing the Best Small Business Health Insurance
Health insurance is the best way to provide for your employees. In this day and age, employees are on the lookout for benefits like health care coverage which can be expensive if not found through an employer.
These options above are the best for small businesses who are committed to offering quality health insurance to their team members. You can’t afford not to provide insurance as healthcare costs are on the rise. What are you waiting for?