Deciding to offer health insurance is a big step for small businesses. While studies show that small businesses that offer health insurance have increased employee productivity, higher job satisfaction, and reduced turnover, it can be expensive to find a health insurance plan that fits with your businesses' budget.
This guide will break down the basic components of offering health care to your employees, and recommend some useful online tools to help you find the plan that works with your needs.
SHOP, or the Small Business Health Options Program, are a collection of health insurance plans that provide quality and affordable health and dental insurance coverage for small businesses with between 1-50 employees. While provided by private insurance companies, SHOP plans are tailored for small employers who want to provide affordable and flexible health insurance to their employees. Unlike personal health insurance, if you are eligible for SHOP you do not need to wait for an Open Enrollment Period to find a SHOP plan.
The biggest benefits of SHOP is that your employees can have flexibility in choosing their coverage, you can choose how much you pay towards employee's premiums and whether or not to cover defendants, all SHOP plans are listed on Healthcare.gov, and you may be eligible to receive the Small Business Health Care Tax Credit (For more information on the benefits of shop, visit the official healthcare.gov page.)
The possible downsides of choosing SHOP coverage is that some Association Health Plans (AHPs) could provide cheaper coverage (although unlike SHOP plans, they are not required to provide essential health benefits or protect high-risk patients), and that SHOP plans must be purchased through a broker or the payer directly, instead of on a centralized portal.
The next big decision to be made is whether or not you want to provide only healthcare insurance, or also include other packages, such as: dental insurance, vision/eyeware plans, wellness programs, and prescription drug plans. Offering these plans provides greater peace of mind and affordability to your employees, but they are also more expensive than just providing healthcare alone.
To decide, it's best to ask yourself some key questions: Can you afford to offer expanded packages? Do a reasonable number of your employees need expanded packages? Could your employees otherwise afford private packages?
These are not easy questions to answer, but they will help inform your decision about whether or not the additional plans are worth the extra cost to your business.
There are literally thousands of possible healthcare plans for small businesses on the market, and it can be very hard to find the one that is the best fit for your business. Thankfully, there are a variety of sites that allow you to compare healthcare options to find the ones that fit your needs.
The Chamber of Commerce (a nonprofit organization) offers a handy guide that walks you through the key decisions needed to find the best healthcare coverage, and offers a comparison of different plans. While it is a totally free service, you'll need to enter your email so that they can send you quote options. (Whatever email you enter into these sites will get sent many offers - we recommend making a separate email address that you can use to shop for health insurance and other policies, so that your main email stays focused on other important messages).
Likewise, eHealth (a private company) offers an extremely robust comparison tool for exploring over 1300 healthcare plans for small businesses. The tool encompasses a very wide variety of plans, but eHealth will make a small amount of money (a commission) if you purchase your healthcare plan through one of the providers on their site.
While EcoMap has explored both of these tools and believe they are helpful, we are not affiliated with either nor do we provide a formal endorsement of either service.