Small group health insurance is designed to provide health insurance coverage to relatively small employers’ teams. But what are the pros and cons of choosing small group health insurance? And how do you pick the right plan for your organization?
What Is Small Group Health Insurance?
What exactly is small group health insurance? As the name implies, this is a health insurance program designed for small groups, so that small businesses have an affordable way to provide benefits to their small group of employees.
To qualify for purchasing small group health insurance, you’ll need to have:
· 2-50 employees. Though the exact requirements vary by state, in most areas, you’ll need to have between 2 and 50 employees to qualify.
· Partial payment. In a small group health insurance policy, employers are responsible for paying a minimum specified percentage of employee health insurance premiums; for example, you may be required to pay for 50 percent or more of those premiums.
· Adherence to minimum participation requirements. There may also be minimum participation requirements from health insurance companies. For example, you may be able to enroll in a particular plan if 75 percent or more of your employees are enrolled in it. Minimum participation requirements vary by company and by state.
What Are the Pros and Cons of Small Group Health Insurance?
What are the pros and cons of purchasing small group health insurance?
Here are the pros:
· Convenience and accessibility. Small group health insurance is usually more affordable, more convenient, and more accessible for small business owners. Whether you go through a broker or shop on the open marketplace, it shouldn’t be hard to find a plan that fits your needs. Then, your employees will have a convenient and affordable option for their healthcare coverage.
· Talent acquisition and retention. Health insurance is one of the most popularly demanded benefits among employees, meaning your small group health insurance coverage can assist you with both talent acquisition and retention. Your business is automatically going to be more attractive to competent workers, and it’s going to be much more capable of keeping those talented workers.
· Health and productivity. Better health insurance usually means better healthcare. That means your business is going to be home to healthier, happier workers – and it will likely benefit from higher productivity as a result.
· Relative affordability. While many small business owners are justifiably worried about the costs of health insurance, small group health insurance is relatively affordable.
· Tax advantages. There are also some tax advantages associated with offering health benefits to your employees, mitigating the expenses.
There are only two major cons:
· Overall costs. There’s no getting around it: small group health insurance is an additional expense. It’s going to increase the cost of doing business, and it’s up to you to decide whether that cost is worth it.
· Restrictions and limitations. There are some restrictions and limitations for how and when you can purchase small group health insurance. Each insurance company can also set some of its own requirements. Because of this, small group health insurance isn’t always conveniently available and isn’t always a good fit.
How to Choose Small Group Health Insurance
The ACA requires that all marketplace health insurance plans have coverage for 10 essential health benefits:
· Ambulatory patient services.
· Emergency services.
· Hospitalization.
· Pregnancy, maternity, and newborn care.
· Mental health and substance use disorder services, including behavioral health treatment.
· Prescription drugs.
· Rehabilitative and habilitative services and devices.
· Laboratory services.
· Preventive and wellness services and chronic disease management.
· Pediatric services, including oral and vision care.
Beyond that, you’ll need to consider things like:
· Benefits and coverage. What is covered and how are costs covered? Some plans offer much better coverage than others, with multiple “tiers” of coverage for different types of buyers. Depending on your goals, you may be interested in providing as much coverage as possible or you might prefer sticking with a more minimalistic strategy. As you might expect, the better the health insurance coverage is, the higher the premiums are; there’s a sliding scale, so you’ll have to figure out exactly where you want to be on that scale.
· Network and availability. You’ll also need to think about the network and coverage available to employees. Will your employees have a wide range of different professionals to work with, or are their choices limited?
· Premiums and employer minimums. Obviously, you’ll also need to compare premiums and employer minimums. How much will you be required to pay and what is the total cost to your employees?
· Discounts and perks for lifestyle choices. Some small group health insurance policies offer discounts and perks for certain lifestyle choices. For example, employees may qualify to be reimbursed for gym membership costs or they may have a premium discount if they’re willing to prove certain aspects of their lifestyle and health.
· Alternatives. When shopping around, keep in mind that there are many alternatives to small group health insurance. A health stipend system, health savings accounts (HSAs), flexible spending accounts (FSAs), and other options may make more sense than a traditional small group health insurance plan.
Shopping for small group health insurance probably isn’t going to be your favorite task, but it’s also not an especially challenging one if you know what you’re looking for. With better benefits and more robust coverage, your employees will be much happier.
