Things New Business Owners Need to Know About Group Health Insurance

There’s a lot to learn when you first start a business. And then, as your business grows and expands, you might be subject to new rules and regulations. Health insurance law is an entire specialty on its own, but here are the basics all business owners need to know.

Are you legally required to provide health insurance for employees? That depends on the size of your business. If you employ more than 50 full- or part-time workers, you are required to provide them with a health insurance plan.

Even if you are not required to provide health insurance to employees, you should consider it anyway. If you employ fewer than 50 people, you aren’t subject to rules on providing health insurance. But it would be wise to consider doing so anyway. A group health insurance plan is often cited as a top priority of those looking for work, and can also help you retain loyal employees. And since the government provides incentives, enrolling in a group health insurance plan can help you, too.

There are four primary types of group health insurance plans. Health insurance plans can be structured in different ways. The four most common types include:

• Preferred Provider Organization (PPO)
• Health Maintenance Organization (HMO)
• Exclusive Provider Organization (EPO)
• Point of Service (POS)

Because these plans are all organized differently, the monthly premiums for each can vary widely. We definitely want to caution you against choosing the most affordable plan. What appears affordable on the surface isn’t always such a great deal, because copayments and deductibles can be higher, or services included on the plan can seem inaccessible due to distance and other factors.

How much will a group benefits plan cost? Only 27 percent of small businesses pay the full cost of employee premiums. But on average, employers pay $5,700 per employee on single coverage plans, and $14,000 per employee on family plans each year.

Are there any tax benefits to providing health insurance? Yes, whatever the amount you decide to contribute to employee healthcare plan premiums is deductible on your tax returns as a business expense. And certain small businesses can claim the Small Business Health Care Tax Credit.

To learn more about establishing a group healthcare plan for your employees, call one of our insurance specialists. We can help you understand your options, and the pros and cons of each one, so that you can make the choice that works best for your business.