Business health insurance - Cover your business
There are several small business health insurance plans that the business owner has to choose from, and having health insurance for small business makes the business more effective, because employees are healthier and less stressed.
Those who are uninsured often avoid going to the doctor because of the high cost of medical care in today's society. As a business owner, this can cut into your business's profitability, as your employees may end up taking more sick days than they normally would as simple medical problems increase and become even more serious, since they do not seek medical care due to the cost. Not only are that, but employees who are concerned about their health less productive due to stress. Offering small business health plans to your employees helps your business in the long run, and they are more affordable than you might think!
It is called small business group health insurance. Group plans are organized into networks, and the insurance company signs up several small businesses for the same network. The doctors in the network agree to lower the medical costs for those insured. The insurance company then pays a portion of the medical costs that the participants have each year. Typically, group plans have a deductible that the insured individual has to pay before the insurance pays any money into the medical bills. Of group policies, there are two main types of networks, Health Maintenance Organizations, and Preferred Provider Organizations.
Your medical insurance costs may be determined solely on the basis of your company's experience, such as the aggregate number and dollar value of claims submitted by your employees. In other cases, you'll be a part of a larger statistical group that the insurance company or health-care provider uses in calculating your premiums.
Be sure to explore the wide range of options available in health-care coverage today, including these:
Fee-for-service coverage provides eligible employees with the services of a doctor or hospital with partial or total reimbursement depending on the insurance company.
Health maintenance organizations (HMOs) provide a range of benefits to employees at a fixed price with a minimal contribution (or sometimes no contribution) from the employee, as long as employees use doctors or hospitals specified in the plan.
Preferred provider organizations (PPOs) are considered managed fee-for-service plans because some restrictions are put in place to control the frequency and cost of health care.
Employees pay $5 or $10 for each visit to doctors specified in the plan, and the insurance company pays the rest. PPOs differ from an HMO in that if an employee goes to a doctor not specified by the insurance company, the plan still partially covers it. A "flexible-benefit" plan allows employees to choose from different fringe benefits. If your workforce is largely white-collar, for example, they may appreciate a health program that encompasses an executive fitness program. Other health programs include vision care plans and rehabilitation for alcohol and substance abuse.
Aside from being concerned about the cost of your health-insurance plan, you should also look into the creditworthiness of the insurance provider. Make sure it's rated 'A' or better by A.M. Best, an insurance industry rating service whose rankings are available online and at your library. When choosing between two providers, go with the higher rated, established company, even if its cost is a little higher. That way, you can protect yourself from "insurer flight," which when an insurance carrier packs up its bags and leaves rather than meeting new mandates in your state.
Growing enterprises need to know that government legislation requires businesses to offer continued coverage in health insurance benefits even after an employee has left. The Consolidated Omnibus Budget Reconciliation Act (COBRA) calls for this privilege to be extended to any worker in a firm with 20 or more full-time employees.
Your company will probably be eligible for a small business plan if it meets the following criteria:
- Your company consists of at least two full-time owners, officers, partners and/or employees, as verified by officially-filed state quarterly wage and tax statements (e.g., NYS-45 in New York and DE-6 in California) or annual federal tax return documents;
- Your company is a legitimate business entity (i.e., your company was formed for a purpose other than to obtain insurance), as verified by one of the following documents:
- A business license or fictitious name filing (proprietorships and partnerships);
- Articles of incorporation (corporations); or
- Articles of organization (limited liability company).
- Your company meets the minimum employer contribution percentage set by the insurance company.
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