Small Business Employee Health Insurance: A Quick Guide

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Many people falsely believe that large corporations are the job creators in the United States. The truth is that small businesses are the engine that drives the American workforce. Since 2000, small businesses are responsible for more than 65% of job creation in the country.

Some people worry about working for a small business due to the benefits. The assumption is that they will lose access to group rates on health and dental insurance.

Read on for a guide to small business employee health insurance. Explore how small business health insurance works so that you feel more comfortable.

Affordable Care Act (ACA)

The ACA was passed by the Obama administration in the late 2000s. This law completely overhauled the requirements for small business health insurance.

Under the ACA, businesses with 50 or more employees are required to provide health insurance to their employees. The insurance offered must meet the government’s standards for quality and affordability.

If the business fails to offer quality healthcare, it must pay a penalty to the Internal Revenue Service (IRS). These businesses with 50-plus employees also need to report to the government that they are providing adequate insurance.

For small businesses with less than 50 employees, the ACA established the Small Business Health Options Program (SHOP). Small businesses can enroll in SHOP through a private insurance company. The benefit of doing so is qualifying for a small business tax credit to lower your premium costs.

All employers must provide a summary of benefits and coverage to their workers. This summary details what the health insurance plan covers and how much it costs. The intent is for employees to better understand their health care options under the ACA.

The ACA also sets quality provisions for health care. Deemed the health care bill of rights, the ACA makes it illegal for insurance companies to deny applicants with pre-existing conditions. Also, things like maternity care are covered and lifetime caps on health care spending are now prohibited.

Group Health Insurance

Typically, health insurance is more expensive when an individual purchases it alone. To secure lower rates, larger numbers of people started to come together to purchase group insurance. The end result was lower rates and better coverage.

There are a number of benefits for employers that offer group health insurance. For starters, they are able to recruit quality employees who are seeking health and stability for their families.

Another benefit is increased productivity from their employees. Workers that carry quality insurance are able to stay healthier and remain on the job longer. The end result is more productive work hours and less sick time.

Employers also benefit from group insurance because their contribution is tax-deductible. Also, your employees are satisfied because group insurance plans typically have access to a larger network of doctors and facilities.

Your Guide to Small Business Employee Health Insurance

Providing your employees with quality health insurance is crucial. It allows you to recruit and retain productive workers.

Employees are satisfied with lower rates and better coverage. Employers also benefit because their premiums are tax-deductible and health insurance increases productivity.

If you are in the market for small business employee health insurance, contact us today to get started.