As the year draws to a close, small business owners face many important decisions. 
For small businesses, almost all decisions ultimately play a role in the success of the company.
provided by the health insurance company is a prime area for potential improvement, as is often the biggest overhead, other than payroll. To determine if you need to change your health benefits in 2016, it is important to understand your options, at least on a basic level. Here is a look at the advantages and disadvantages of group health insurance and health plans to defined contribution plans.
Health Insurance Group
health insurance group is selected and purchased by you, the employer. Generally, the cost of the premium is divided between the company and the employee and there is a minimum percentage rate you have to contribute to premiums.
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- most employers and employees are familiar with the operation of the group of insurance and are therefore more comfortable with this option because it generally requires less change and education.
- with increasing new group health insurance plans available to small employers across SHOP market, you have a number of plans to choose from. The SHOP market can be an interesting option, especially if you are eligible for health care for small business tax credits.
- For large companies, group health insurance can do a lot of sense. Because the risk is spread over many employees, generally that lowers premiums.
- employees with large families can benefit from traditional group insurance because they do not have to pay a separate cost for each family member.
Cons
- This number varies, depending on many variables. However, most of the companies that offer traditional group insurance to their employees and their families are investing a significant amount of time in administrative work.
- The one-size-fits-all nature of the insurance group health plans are hit or miss. The plan chosen by an employer will probably end up perfectly meet the unique needs of an employee, but more frustrating that would have benefited much more other types of plans.
- In the traditional model, a company provides health insurance for employees and their dependents. Typically, the company and employees share the bill with employees to pay all or most of what it costs to add family members. Financially, there are drawbacks to this system. Specifically, premiums increase from year to year, depending primarily on the health costs of all staff, but premiums increase equally for all employees rather than a basic person by person.
- group Initially research and compare health insurance plans from multiple vendors is a long process. The nuances of each plan are many, and of course, you want to carefully explore the shades so your informed decision will maximize financial contributions from company employees and.
Health Plan Defined Contribution
With a health plan defined contribution you offer your employees a fixed deductible health care they can spend on buying individual health insurance. The employee is reimbursed for their costs-up health plan for their health care available balance that has been predetermined by you.
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- On average, individual health insurance costs 20 percent less than traditional group plans
- with the using tax credits premiums -. exclusive to people with individual health plans - and defined contribution provided by the employer, many employees of small businesses can have 100 percent of their premium covered.
- employees can choose the plan that best fits their individual needs. They can do as much research as they deem necessary before choosing the type of coverage that fits well with the history of their health, future goals, and preferred payment strategy.
- With individual health plans, employees have options. There are four levels of coverage from which to choose. In each level, they can choose coverage by the insurance company, physician network and franchises.
- As an employer, you have the luxury of predictability of the total cost, and there is no minimum or maximum contribution.
- eligible employees can tap into discounts on their premiums by way of premium tax credits.
Cons
- individual health plans require significant advance employee involvement because they are the ones selecting the plan that best fits their needs. While many find the opportunity to choose their own health insurance refreshing, others may be overwhelmed by the process. Educating employers is critical to the successful adoption of this new form of health insurance, so defined contribution health plans will have more time with employers from some health insurance options alternative.
- A contribution health plan is determined a payroll function, which is different than many companies expect in the management of health insurance for their employees. Many employers see this as a disadvantage because they are not as familiar with the plan management process.
- Employees must pay for their health care from the start, before being reimbursed by their employer. This can make employees uncomfortable if not properly informed about the process.
- Change is difficult for employers and employees, and if you are currently offering a group health plan, the transition can be difficult to embrace.
Conclusion
There are no insurance solution of health that works for every company. As an employer, you have the responsibility to determine what is best for your employees and your business as a whole. While the group of insurance and contributions to health plans determined are not the only two options for you to choose, the more educated you are about these options and alternatives available to you, you are better make an informed decision.
If you have a question about the intricacies of these plans, leave please comment below.
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