How Many Employees Do You Need For Small Business Health Insurance

Small Business Health Insurance

How Many Employees Do You Need For Small Business Health Insurance?

What Is Group Health Insurance?

Group health insurance is less expensive compared to individual plans that have similar benefits and coverage. However, the group insurance plan is not for everyone; others may not be qualified. If you are an owner of a small business, you would want to know if you qualify for group health insurance before you apply for coverage. 

Small Business Health Insurance For Full Time Employees

If you own a business, it is important that you understand how the size of a specific business can affect the operations. According to government agencies, each type of business has its own procedures to follow when it comes to affordable care provision to its employees. For business owners, it is always a challenge to keep up with the rules and regulations related to health care. There are requirements that business owners need to know when applying for coverage and the advantages of group health insurance for their employees.

A business with less than 50 full time or full time equivalent employees is considered small and is not required to provide health insurance to its employees in 2020. But businesses with 50 or more full time employees, the employer is required to provide their workers with health coverage or else they need to face penalties. 

Advantages of Small business for Offering Health Insurance

For small businesses to offer health care insurance is not required for employers, but there are various benefits if their employees are covered with affordable care. Here are some of the advantages of providing business healthcare insurance plans to your workers.

  • Keeping and attracting employees – Providing your employees with health insurance coverage for business shows that you value your workers. It will help your business to attract better employees while keeping your best ones. A health insurance plan as part of the compensation package for workers is an appealing incentive for people to join your company.
  • Helping your business stand out – According to the Bureau of Labor Statistics, there is only about 55% of small businesses with less than 100 employees that offer medical benefits through small business healthcare policy. Employees sign up for the group plans even though they know they need to pay a portion of the premiums.
  • Building healthier human resources – If the employees are covered with health insurance, they will unlikely be absent from work for sick days, and it is an excellent favor for small businesses to be more productive. Through the availability of many health care options, your employees can take care of their medical needs with ease and will not disrupt their work schedule.

Overall, it is a worthwhile investment for small businesses to offer group health coverage no matter what the employers’ requirements are.

How can a small business offer health insurance?

Federal and state laws require that a business should not have more than 100 employees to qualify as a small business to offer group health insurance. Some new businesses are having difficulty qualifying for coverage. If you are a small business owner, you can find group affordable care and health insurance online, and you can start comparing plans from multiple insurance companies. You may be surprised how your small business can operate efficiently and effectively with the help of health insurance for small businesses. It is because having health policy will not only benefit the full-time equivalent employees, but employers may discover that there are ways that group plans can help them as well. It is because having health policy will not only benefit the full-time equivalent employees, but employers may discover that there are ways that group plans can help them as well. The options for health insurance depend on the size of the business, and solopreneurs can avail coverage from these sources:

  • Individual marketplace. You can buy an individual plan from healthcare.gov using this option. Your income and location will determine your eligibility for premium tax credits.
  • Private individual plan. When you have availed an individual policy from health insurance carriers, you will not be eligible for any government health insurance premium coverage.
  • Trade association plan. Professional trade associations let their members avail of group health insurance plans. You can potentially save with it compared to private individual policies.
  • Medicare. This health insurance provides an insurance policy for seniors. Your qualification will depend on your age and tax contribution history for medicare.

For multi-person small businesses, you can avail health insurance from these sources:

  • Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). It is a subsidized healthcare coverage plan where employees can allocate a monthly healthcare aid for each of its employees. In the event, the employee shows proof of their health expenses, and the employer will reimburse them. For the company to qualify, small businesses must not have more than 50 full-time employees.
  • Small Business Health Insurance Program (SHOP) marketplace. Your business address must be within the state where you will want to provide a SHOP plan. The size of the business can determine your business eligibility to offer SHOP. It must have 50 full-time employees, other than the members of the family of the owner or the owner itself. The SHOP coverage should be offered to full-time employees, and at least 70% must enroll.
  • Private group plan. A lot of major health insurance providers provide group policies for small businesses of different sizes.

The cost of any healthcare insurance for small business owners and any of their employees will depend on their age, location, and size of the workforce. Different insurers have their own limits on the minimum number of employees to issue the policy. It will also depend on what, if any, premium cost-sharing set-up you have with your workers to reduce your costs. 

Conclusion

A group health plan is a health benefit plan for employees supported by an employer or by an organization the employee is a member of, or it can also be both. It provides medical care for the employees or their dependents through direct assistance or insurance reimbursement. 

As a small business employer, the best advantage of buying a group insurance policy is the discount on costs. Compared to individual plans, a group health policy offers better benefits at affordable costs. It is due to having a larger risk pool, or the risks are spread to more people. It is because more people are paying for their health insurance plans, so the average cost is more stable. In other words, group policies often cost less per employee. This information about group health insurance for small businesses will help you make informed decisions about health insurance for you and your employees. 

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