Pennsylvania is a state of small businesses, boasting over one million local small businesses, which forms over 99 percent of its business economy. However, despite this, not many Pennsylvania small business owners offer Small Business health insurance plans to their employees because of the ever-increasing costs of these policies, with premium costs rising around 113 percent for the past decade.
But with the increasing demands of employers and employees alike, there are now different types of health insurance for small businesses that are cost-effective. It allows small business owners in Pennsylvania to ensure they and their team acquire the proper coverage for their medical needs in the event of a sudden sickness spreading or accidents without having to pay large sums of money.
To make it easier for you, here is a definitive guide about Small Business health insurance plans in Pennsylvania, helping you determine which is the best health insurance plan for your business.
Pennsylvania Small Business Insurance Health Plans: How Does it Work?
When you purchase a health insurance plan for your company and employees, you typically pay an insurance company or carrier a monthly premium fee to protect you and your team when medical bills come up.
Here are the four things that every employer should know about Small Business health insurance:
Coverage is Usually a Guaranteed Issue
First, if you are qualified to have a company health plan, your coverage is typically issued by the insurance carrier. This factor means that these insurance providers cannot turn down you, your employees, and their dependents for coverage based on pre-existing medical conditions. All eligible full-time employees of your small business and their qualified dependents can enroll in the new plan regardless of their medical conditions.
You Need at Least One Full-Time Employee to Qualify
For you to be eligible for any Small Business health insurance plan, you need to have at least one full-time employee, and this doesn’t include you and your spouse that may be working for your company. Although the rules vary from each state and different insurers, that is usually the general requirement. You can ask your local government and insurers in Pennsylvania for more information.
You Need to Contribute Toward Employee Premiums
Besides having the right number of employees, you need to pay at least 50 percent of their monthly insurance premium costs. However, the minimum percentage can also vary by state and insurers. You can also contribute towards the premiums for your employees’ dependents. Consult with your local government and insurance carriers in Pennsylvania for more information.
You Can Buy Coverage at Any Time of the Year
As an employer, you can shop for health insurance coverage anytime you like, you don’t need to wait for a particular open enrollment period. However, keep in mind that once you purchase health insurance plans, your premiums are locked in the whole year, and you can add new employees and dependents to the policy as you like. You can also drop coverage for people that no longer work for you. An employer can renew insurance coverage or shop for a new plan by the end of the year.
Types of Small Business Health Insurance Plans
Here are the most common insurance coverage options that you can choose from:
Health Maintenance Organization
The HMO plan provides a cheaper and comprehensive health plan with lower out-of-pocket costs. However, you are limited to choosing healthcare providers and facilities in-network (providers selected by the insurer of your choice) to avoid additional fees. Each member under the plan is required to select PCPs (Primary Care Physicians) included in the list of the providers from the insurer, and they need referrals from the PCP if they need to see a specialist.
Out-of-pocket costs are limited to low co-payments for physician visits, yearly deductibles, and other covered services, making the additional costs minimal to non-existent. The vastness of providers in the HMO network will vary by location.
Preferred Provider Organization
The premium costs for a PPO plan are more expensive than the standard HMO plan, but it offers you vast networks to choose from, giving you more flexibility and choices. Members under this plan are not limited to selecting in-network PCPs, and they don’t need referrals to see a specialist. They are allowed to choose any healthcare provider or facilities regardless of whether these providers are in the plan’s network. Still, the costs may be higher for out-of-network services.
The out-of-pocket fees that members have to pay for themselves include co-payments for doctor consultations, annual deductibles, and other medical services.
Point of Service Plan
The POS plan is a combination of the PPO and HMO policies and is mid-range between the two. The POS network will vary by each state. Members are required to choose an in-network PCP for their medical services, but they don’t need a referral to see a specialist to receive benefits included in the POS plan. Although members can go outside the network for other services, it is a bit more flexible than an HMO plan.
The out-of-pocket fees that members under a POS plan are minimal compared to members under a PPO plan, as they only pay a small portion of the covered services.
You can consult with a licensed insurance agent for more information to help you find the best coverage options and plan that’s best for you and your workers.
Pennsylvania Health Insurance for Companies Coverage
Pennsylvania legally requires health insurance plans to cover all legitimate medical conditions, including minor situations like a doctor consultation when a person becomes sick due to significant events like pregnancy or surgery.
The ACA (Affordable Care Act) requires all health plans to provide minimum essential coverage, including:
- Preventive Care
All employees’ and employers’ annual physical screenings, immunizations, and any other consultation required to ensure you are healthy.
- Emergency Services
The plans cover all trips to the ER (Emergency Room) and ambulance rides.
- Maternity Care
Care received for female employees or employers before and after their baby is born.
- Lab Tests
Testing that helps a physician diagnose illnesses and injuries or monitor the effectiveness of their implemented treatments.
- Prescription Drugs
The insurance plans cover all medications prescribed by a physician to treat medical conditions and illnesses.
- Ambulatory Patient Services
All care received outside of a tertiary healthcare facility, including the doctor’s office, outpatient surgery center, emergency room, or home health services, is covered by the health plans.
The insurance plans cover all you receive inside healthcare facilities, including doctors, lab tests, room, board, medication, surgery, labor, delivery, transplants, and more.
- Rehab Services
The plan should cover all care and equipment fees that help you recover from injuries, disabilities, and other severe conditions. These can include physical therapy, psychiatric rehabilitation, occupational therapy, and speech-language pathology.
- Mental Health and Substance Abuse Services
It covers outpatient and inpatient evaluation, consultation, treatment of all mental health, and substance abuse conditions.
- Pediatric Services
It should cover all vision and dental care for children younger than 19 years old, including at least two dental cleanings, one set of appropriate lenses, and one eye exam.
Benefits of Pennsylvania Health Insurance for Company
The following are the advantages that employees and employers can enjoy when having a company health insurance:
Have Access to Quality Medical Care
Health insurance plans provide employers and employees with access to a network of physicians, hospitals, pharmacies, and other healthcare providers covered under your insurance plan. They provide you with the right treatment with no additional charges or entirely free (depending on the policy you choose). You can ask your Pennsylvania insurer for more information.
Tax Deductible Premiums
Health insurance premium fees on small business plans are all tax-deductible for the employees and the company, reducing the cost of coverage by 25 to 50 percent.
Small Business Tax Credit
Small companies with fewer than 25 full-time equivalent employees and payroll costs of less than $50,000 per worker can qualify for an additional tax credit of up to 50%.
How to Become Eligible for a Small Business Health Insurance Plan
Because of the benefits that health plans provide for small businesses over individual coverage, insurance companies require that these smaller firms meet several requirements to verify their eligibility first.
Most providers look at the following to determine if you are qualified:
- Be registered as an official firm in your home state
- Have at least two workers working for over 30 hours per week at the company, with one W2 employee besides the owner
- Have clean and detailed history records for salaried workers and tax or ownership documents for company owners or employers
Qualified Employees for Small Business Health Insurance Coverage
The following eligibility criteria ensure your employees are eligible for the health plans:
- They Work Full-time Hours
Full-time work hours are when you are working for a company for over 30 hours per week, but in some states, employers can offer coverage to part-time employees that work less than 20 hours weekly.
- Employed as a W2 Employee
In most states, 1099 contractors (individuals who work independently rather than for an employer) are not qualified to be covered under health insurance plans. However, if 1099 contractors work for over 30 hours per week, they can be eligible for company coverage.
You have worked hard to grow your company, and if you want to keep the top talent that you already have, it’s best to invest in health insurance plans to keep your Pennsylvania business stand out among the rest. Choose the best health plans that can contribute to the growth of your enterprise.