Health insurance is one of the biggest challenges for small business owners.
This is a problem for anyone who does not participate in a government-sponsored or employer-sponsored plan, but small businesses have special concerns.
For small businesses, health insurance is complicated by the fact that there may be employees. Do you just get coverage for yourself, or do you extend the analysis to your employees?
The answer is different for businesses, but there are ways to work done a self-governing insurance broker
Most people think that working with an independent insurance agent will mean higher health insurance premiums, but that’s not true. Insurance brokers receive a percentage of the premium collected by the insurance company – the premium will not be different if you use a broker or not. The broker’s advantage is a gift.
There are two reasons why you should work with a broker:
Medicare is complicated, and unless you are a health insurance broker yourself, you need it. Not only does an independent agent know various plans, but he also knows the industry. This comes because the broker works with many different insurance companies, as opposed to working exclusively for one. He can use this knowledge to put you in the right place for your business.
You will change plans frequently
Just like the big employers who are changing health plans and health insurance companies pretty much every year, you will have to change to stay ahead of the unrelenting price hikes. Since a broker is not tied to an insurance company, he is free to move in different plans with different companies as needed.
Do you cover yourself or do you need a group plan?
Health insurance for a small business owner
Getting health insurance for a shorttrade owner is yet another concern to add to your business.
If you are only covering yourself and your family, you will be looking for a simple private insurance plan. But if you have employees, you’ll need a group plan, and it’s a lot more involved.
With an individual plan, the premium will be based on the health of you and your family. But if you opt for group coverage, the premiums will be based (and increased) on the overall health and claims experience of the group. If you and your family are healthy, but you have one or more employees who are not, you may not want to go with group coverage.
But group plans also have their advantages.
If your business has group coverage, registration will be automatic – the insurance plan accepts members based on their employment in your company. This means that pre-existing conditions that could prevent you from obtaining private insurance will be accepted in a group plan. If you or a family member has such a situation and cannot get a private strategy, a collection plan could be the way around that.
Due to the cost of administration and the absence of exclusion for pre-existing conditions, group plans will be more expensive. But sometimes they make the difference between having health insurance and doing without it.
Keep costs low
Health insurance is costly, but there are ways to make it less.
You start by finding the insurance company that will provide the most comprehensive coverage at the lowest price, but that’s just the beginning.
You can still reduce health insurance premiums by increasing your co-payments, deductibles, and co-insurance requirements. You can increase them until the plan becomes affordable. Increases, particularly in deductibles and co-insurance, can make a substantial difference in monthly premiums.
Plans with deductibles more than a few thousand dollars are often referred to as “catastrophic” insurance because they only cover medical disasters. These plans do not cover most of the ordinary medical expenses, but they cover the kind that can send someone into business distress, such as major surgeries or extended stays in the hospital.
If you increase the deductible well beyond $ 1,000, consider adding an HSA to offset it.
Health Savings Accounts (HSA)
You can decide to use a health savings account in combination with your health insurance plan. HSA can save you money on insurance premiums because they are used in conjunction with high (catastrophic) franchise plans.
As debated in the previous section, catastrophic health insurance costs less because the deductible is higher. But you cover the higher deductible with an HSA.
HSA has several benefits, some of which contain:
It allows you to store money to cover the deductible on your health insurance
The money you put into an HSA is tax deductible, so the government pays part of your deductible
Any unspent money in the account stays in the account and can even earn non-taxable interest, turning your HSA into an IRA. Not only is it a good deal for you, but it can also be attractive to employees.
As you can see, health insurance plans for small businesses are complicated by all the options. If you want to set up a strategy, start doing your research early and ask for the maintenance of a health insurance broker when you do it.