Did you know that only 50% of small business owners in the US offer health insurance benefits to their employees?
Rising premiums are a concern for us all, no matter what type of insurance we have — or don’t have. If you’re among the 50% of business owners who don’t currently offer health benefits, it’s time to reconsider your options.
The truth is the small group insurance can be affordable and convenient for both you and your employees. How do you know if you qualify for it, though? And how is small group insurance different from large group insurance?
We’ll answer those important questions and more, so keep reading!
What Is Small Group Insurance?
Laws vary by state, but generally speaking, small group insurance is available to companies with 1-50 employees. This means you can get high-quality coverage for everyone in your business, even if it’s just yourself and one employee.
In some states, the limit for “small” group insurance climbs to 100 employees. Whatever the cap, you can choose from a variety of different healthcare plans, including HMOs, PPOs, and hybrid POS plans.
Depending on your state, you’ll need either 51 or 101 employees to qualify for large group coverage.
It’s important to note that you’re bound by the laws in your area that determine which “size” your company is. For example, if you have 75 employees and the state considers that to be a “large” group, you can’t opt for small group coverage because of personal preference.
Similarities & Differences
The number of employees you have is the biggest determining factor in whether you’ll qualify for small or large group insurance.
However, their similarities don’t end there. Both types of coverage also offer great tax breaks to you, the employer. Beyond that, these two types of group insurance have some key differences too.
Because small group insurance is offered to fewer people, it’s more customizable than a larger group plan. You can sit down with your employees and find out how much they can afford to pay in monthly premiums and co-payments. You can also find out which benefits they’re most interested in, such as prescription drug coverage or vision and dental care.
One important thing to note about small group insurance is that the rates are usually fixed. They’re based on the number of people who enroll, as well as their age and general health.
In contrast, there’s usually some wiggle room to negotiate rates with large group insurance. Because the prices aren’t set ahead of time, your broker can help to negotiate better prices for you and your employees.
However, because the insurance applies to more people, there’s usually less room for modifications.
Small Group vs Large Group Insurance: Final Thoughts
Like most factors related to insurance, your location makes a big difference in the types of insurance available to you.
Depending on your locale, your company will qualify for either large or small group insurance (but not both). It can be challenging to understand your state’s laws, so your best bet is to chat with a skilled insurance broker.
Give us a call at 210-469-3900 or use our online contact form to get in touch. We’re happy to answer any questions you have about insurance!