The Simple Guide to Health Insurance for small business

The Simple Guide to Health Insurance for small business -

Building a successful business is hard work . Navigating Medicare small businesses, however, need not be.

Although each small business has its own unique goals and challenges in search of health insurance, the good news is that there are new opportunities for affordable health insurance. Wondering where to start? This guide is broken health insurance for small businesses bases for small business owners.

In this simple guide to small business insurance health, we will address the following topics:

• the value of health insurance

• Small Business Basics health insurance

• Understanding health reform

• planning of health insurance

• budgeting for health insurance

• your options Assessment

the value of health insurance

first, why small businesses offer health insurance? Under the Affordable Care Act (ACA), small businesses do not offer health insurance, but there are several advantages of the offer - and have - a health insurance coverage.

Offering health benefits is invaluable to your business because it allows you to:

• Recruit and retain top talent

• promote health and well-being of employees

• you have coverage for you and your family

Moreover, the ACA requires all individuals to have health insurance. By providing access to health insurance, you are providing a way for your employees to have health insurance coverage and conform to the ACA's individual mandate. We'll talk more later ACA.

Small Business Basics Health Insurance

In this section, we will simplify the common health insurance terms and concepts to help you navigate health insurance.

two main types of health insurance

There are two main types of health insurance available to small businesses: health insurance and individual health insurance

1 .. Group health insurance

health insurance is a type of policy purchased by an employer and offered to eligible employees of the corporation and eligible dependents of employees. The cost of the premium is usually shared between the employer and the employee, and there is a minimum percentage rate, the employer must contribute to the premiums. Small businesses can purchase a group health insurance through a broker, online or via the new ACA Small Business Health Options Program (SHOP) market.

The cost of group health insurance: In 2014, the average cost to cover one employee with group insurance was 502 $ / month or $ 6.025 / year. For family coverage, group health insurance costs $ 1,403 / month or $ 16,834 / year. These costs are generally shared between the company and the employee.

2. Individual Health Insurance

individual health insurance policy is a type of a person buys for himself and / or his family. In 2014, all individual health plans cover employees regardless of health. Small businesses can set up a premium reimbursement arrangement to pay tax-free for employees of individual health insurance -. Similar to how you contribute to the group health insurance premiums

The cost of individual health insurance: The cost of individual health insurance will vary by the employee. On average in 2014, individual health insurance costs $ 346 / month or $ 4,152 / year before the tax credit reductions on premiums. In 2014, 87% received tax credits and paid, on average, only $ 82 / month for all types of plans - or $ 984 / year

The following table comparing the characteristics of the group. health insurance and individual health insurance:

Types of Health Insurance Plans

Whether you're looking to insurance health insurance or individual health group, are several types of health plans available. The four common types of health insurance are:

1) PPO Health Insurance Plans

Preferred Provider Organization (PPO) plans are most common. Employees covered by a PPO plan need to get their medical care by doctors or hospitals on the list of preferred suppliers for the insurance company to pay claims at the highest level.

2) HMO Health Insurance Plans

Health Maintenance Organization (HMO) plans offer a wide range of health care services through a network providers that contract exclusively with the HMO, or who agrees to provide services to members. Employees on this plan will generally need to choose a primary care physician ( "PCP") to provide most of their health care and refer them to a specialist HMO necessary.

3) Health Insurance Plans HSA-qualified

HSA qualified plans are generally PPO plans designed specifically for use with health savings accounts (HSA). An HSA is a special bank account that allows participants to save money - before taxes -. To be used specifically for medical expenses in the future

4) Indemnity insurance plans

compensation plans allow members to direct their own care and usually visit a doctor or hospital. The insurance company then pays a set portion of total expenses. Employees may be required to pay for services up front, and then ask the insurance company for reimbursement.

health insurance Key Terms

Finally, to understand the different coverage options, you must understand the five basic insurance terms -maladie:

1. health insurance premium -. Your premium is what you pay monthly, quarterly or annually to be part of a health insurance plan

2. duty - your deductible is the amount you must pay for covered services before your health insurance starts paying.

3. Co-Pay - Your co-payment is a dollar flat you pay your health care provider for a service covered.

4. Co-insurance - Your co-insurance is the percentage of expenses authorized for covered services you 're required to pay. If the plan has a deductible, you pay coinsurance for services covered after the deductible is met.

5. Out-of-Pocket Maximum - Your out of pocket maximum is the maximum amount of money you pay for services covered during a benefit period (eg during a year). This financial responsibility may vary from plan to plan, but may include coinsurance, deductibles and coinsurance.

Understanding the impact of health reform

As a small business, it is important to understand the main provisions of the ACA (aka health care reform). Understanding these reforms will help you navigate the best health insurance small business for you and your employees -. And take advantage of new cost reduction opportunities

Employer Mandate

as a small business owner, you may wonder, "I need to provide health insurance employees?" No company can afford health insurance. However, the ACA includes a mandate for some large employers (with 50 full-time equivalent) be qualified and provide affordable health insurance or pay a tax penalty. This is commonly called the employer mandate or employer to share the costs of liability.

Individual Mandate

Most Americans are required to have health insurance or pay a tax penalty if they do not . This provision ACA is called the individual or the individual mandate shared responsibility fee. Coverage may include insurance based on employment, health, individual health insurance, or insurance through a government program like Medicaid or Medicare.

Health insurance markets

Health insurance markets are new sites where you can shop, compare, and register in an individual health insurance plan or a small business "SHOP" from Medicare.

Each State has a market that is either managed by the State (eg CoveredCA.com) or federal (HealthCare.gov). The markets for shopping for health insurance easier and that individuals and small businesses to access to health care tax credits.

tax credits premiums

The federal government offers discounts for health insurance to eligible individuals and families. The reductions called tax credits, bonuses help a lot of people buy an individual or family insurance coverage more affordable health insurance in the new markets of health conditions. Discounts can be applied directly to your premium at the time of purchase.

You are if you meet certain conditions allowable income to a tax credit premiums and do not have access to affordable health insurance through an employer or government program such as Medicaid or Medicare.

tax credit for health care for Small Enterprises

Finally, the small business care health tax credit was designed to help small businesses provide health insurance coverage for employees. The tax credit is worth up to 50% of your contribution to employee premium costs (up to 35% for tax-exempt employers). The tax credit is higher for small businesses with fewer than 10 employees who are paid an average of $ 25,000 or less. The tax credit for small business health care is only available for the two consecutive years of tax.

Planning Health Insurance

Now that you understand the basics of health insurance and health care reform, he is time to assess and plan for health insurance. Here is a simple series of questions to help you evaluate your unique health benefits of the needs, objectives and strategy.

1. Who will cover the insurance?

Who provides the benefits of the health enterprise, and these "eligible employees" who will participate?

The answer to this question will help you budget for health insurance, and understand what type of plan you qualify.

2. What is your budget for health benefits?

How can you (or you want to) contribute to health insurance? Consider monthly, yearly and long-term budgets.

The cost structure of health benefits varies the approach you take. See the following section on budgeting.

3. What employees value the most?

Discuss coverage preferences with your employees. They prefer full coverage at a higher cost? Do they prefer a high-deductible plan with an HSA? Do they prefer a health care allowance to use towards a plan of their choosing individual health?

Although you may not be able to respond to all requests (set this expectation in advance), employees' input will be helpful in your decision making.

4. Who will manage health insurance?

Who will administer internally in Medicare? What capacity do they have (time wise, etc.) to manage the administrative functions?

Small businesses often do not have a dedicated member of the HR team. Instead, HR activities are part of a payroll, operations, and / or an administrative role. If this describes you, reimbursement of individual health insurance can be interesting because it takes 5 minutes / month to administer online.

5. What are the benefits to the health of goals?

What other goals do you have with your health benefit program? What is important to you? What is a deal breaker? At the end of the year, making the program a success

For more planning sheets of health insurance, download our free resource -. Health Benefits Planning Manual

budgeting for health insurance for small businesses

When you evaluate and plan for health insurance, budgeting is an important step. As mentioned before, think about how can you (or you want to) contribute to health insurance. Also monthly, yearly and long-term budgets, and the recruitment and retention goals.

The cost structure of health benefits vary by the approach you take.

Group Health Insurance monthly premiums are usually paid by the employer and employees. In most states, employers are required to cover at least 50% of the monthly premium for their employees. This is called a share percentage of the costs or the minimum contribution. Keep in mind that the business can afford, and also that employees can afford. Premium rates normally increase every year

Health Individual Insurance Reimbursement (aka redemption premium) :. The Company defines any amount of the contribution, so that the budget is fully in society. There is no minimum amount of cost sharing. The repayment plan could provide a $ 0 / month flat for employees, and employees would cover any remaining amount of their bonus. Or, the plan could be customized according to the type of employee - for example, providing $ 300 / month for managers and $ 150 / month part-time office staff. the maximum annual costs increase only if you decide to increase the amount of the allowance

For the budget spreadsheets, download our free resource -. Health Services Planning Manual

[ assessment of your small business health insurance options

now it is time to evaluate your options. You have two basic options

Option 1 :. Group Health Insurance

To summarize, the advantages of group insurance are:

• Full-coverage is available to you and dependents.

• Some companies offer more than one plan.

• eligible small businesses can offer a small shop of health and access tax credits healthcare company.

Option 2: Individual Health Insurance

To summarize, the advantages of individual health insurance are:

• There is a high quality health coverage for you and your employees

• it costs 20% to 60% less compared to group health insurance. And for those who qualify, premium tax credits are available to help reduce the cost even more.

• is flexible. Employees choose their plan, the level of coverage, and the doctors and clinics.

• It is portable. Employees can take the plane to any employment (while they are still paying the premium).

• It can be paired with premium refund (your small business can develop a formal plan to reimburse employees for expenses-free premiums tax).

Conclusion

Navigating health insurance for small businesses and the health reform may feel intimidating. We hope this guide is out insurance so you can understand the basics of insurance, evaluate your health insurance goals, and evaluate the best Medicare solution for you, your family and your small business.

What questions do you have about Medicare small business? Leave a comment. We would be happy to help you meet them

Photo credit -. IStock

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