Business Health Insurance Guide
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Business health insurance covers the insurance needs of you and your employees. The definition may sound simple, but in reality business health insurance is a complicated world of plans, laws, and rules. In most cases, business healthcare coverage depends on geography. In the US, more than two-thirds of businesses offer health insurance for their employees. In short, a skilled employee always prefers an employer who gives health insurance.[br]
Business health insurance covers the insurance needs of you and your employees. The definition may sound simple, but in reality business health insurance is a complicated world of plans, laws, and rules. In most cases, business healthcare coverage depends on geography. In the US, more than two-thirds of businesses offer health insurance for their employees. In short, a skilled employee always prefers an employer who gives health insurance.[br]
Table of Contents
Business Health Insurance: Types
Indemnity Insurance: In this type of insurance, the coverage is provided by the insurer or the employer at a particular premium. The insured or an employee can pick any healthcare provider and have the costs reimbursed by the insurer. This scheme works best if the insurer is a large corporate entity.
Health Maintenance Organizations (HMO): HMOs are made up of hospitals, physicians, and health care providers that are tied up with an insurer to provide medical care to its employees at a negotiated rate. The HMO model of health coverage uses a Primary Care Physician (PCP) to coordinate with the insurer and take care of the plan. The PCP refers the patient to a specialist if specialty care is required. Though healthcare facilities are limited to those within the scope of the HMO, the insurer can refer to a specialist outside the HMO with the PCP’s referral.
Preferred Provider Organizations (PPO): PPOs are similar to HMOs in many aspects, but are often more restrictive. While HMOs are connected to multiple hospitals, insurers who are attached to PPOs have a dedicated network of specified hospitals and physicians. If the insurer goes out of the PPO network for a specialized care, they has to pay for most of the services without any assistance from the PPO. Under a PPO plan, the premiums are reduced, but so are healthcare options.[br]
Medicare and Medicaid: Medicare is a health coverage scheme provided by the government to those over 65, or disabled. If your enterprise has employees aged 65 years or more, Medicare is of great help. Medicaid is also a government sponsored health insurance scheme meant to help poor and low-wage workers.
Most American businesses follow either or a combination of these health insurance schemes for their employees.
[break]Small Business Health Insurance Plans
Keeping their employees happy should always be the top priority for employers, in order to ensure continual profitability of their business. Of the many ways they can achieve this is by opting for small business health insurance plans. By selecting a suitable plan, you, as an employer, can protect your employees’ health without disturbing your budgetary requirements. Finding an affordable health insurance plan is simple and there are many companies that will offer you an affordable plan, backed by expert claim-handling professionals and proper customer service.
Small Business Health Insurance Plans: Available Plans
The plans available for small business health insurance purposes are:
Health Maintenance Organization (HMO): HMOs are made up of a network of physicians, hospitals and health care providers, which are tied to an insurer to provide services to its employees at a negotiated rate. Healthcare is limited to consulting physicians within the scope of the HMO.
Preferred Provider Organization (PPO): Unlike an HMO, a PPO offers more choices to employees. In addition, the employees need not refer to any select physician or hospital within the network.
Point of Sale (POS): A POS network does not restrict an employee to consulting a particular physician at any given point of time.
Small Business Health Insurance Plans: Qualification Criteria
To qualify for a health insurance plan, your small business must employ between 2 and 50 full time employees. In addition, your business should also meet the following requirements:
· It should have at least two full time business owners, partners, or employees. The data should be verifiable with the help of wage and tax statements.
· It should be authenticated by either a business license filing, or by articles of incorporation in case of an LLC.
· It must meet the minimum employer contribution percentage as specified by the insurance provider.
Small Business Health Insurance Plans: Advantages
The advantages of a group health insurance for a small business are:
· Lower premiums: In case of a small business, the risks to an insurance company are spread to all the members who are covered by a particular policy. This translates into lower premiums.
· Employee loyalty: Your employees are more likely to stay committed to their job when they know that they are covered against critical medical issues.
· Flexibility: Each member covered can request for additional coverage to fit his/her requirements.
Small Business Group Health Insurance
As a small business owner, there are a number of health insurance options available for you in the market. Taking some time out to do some research goes a long way in making the process of finding a suitable insurance provider a lot easier. After all, your employees are your best assets, and their healthcare and well-being should take top priority.
Small Business Group Health Insurance: Advantages
The advantages of a group health insurance for a small business are:
· Lower premiums: In case of a small business, the risks to an insurance company are spread to all the members who are covered by a particular policy. This translates to lower premiums and extensive coverage.
· Employee loyalty: Your employees are more likely to stay focused and be loyal to their job when they know that they are covered against medical illnesses.
· Flexibility: Each member covered can request additional coverage to fit his/her requirements. A case in point being in asking for additional coverage for immediate family members, and extending it to cover dental and vision requirements.
· Cost: The cost of a group insurance plan for employees is calculated on the basis of their age, sex, and are also calculated in sync with the annual compensation of the employee.
In the US, a majority of the small business owners do not provide adequate health insurance coverage for their employees due to the high cost of insurance policies. Unlike large corporations, they lack the power of buying in volume and are, therefore, charged higher premiums.
Small Group Health Insurance: Options for Small Businesses
Group Purchasing Arrangements (GPAs): GPAs help small businesses by arranging lower premiums and clubbing multiple small groups together to achieve the buying power of a large organization. In the US, the states that have GPA are Arkansas, Kansas, New York, Texas, Ohio and Wisconsin.
High Risk Medical Pools: In most states, people with pre-existing medical conditions struggle to find health insurance. In many cases, they are insured through their employer or are included in a plan through their family members. But for others, who are between jobs, self-employed or working in a firm that does not provide insurance, high risk pools are a viable safety net. In the US, 31 states operate high risk medical pools. This type of insurance is more expensive. States like Arizona, Georgia, Massachusetts, Nevada, New York, Pennsylvania and Virginia do not offer high risk medial pools.
Reinsurance: Some states provide health insurance subsidies to small business owners in order to provide insurance options to their employees. In some cases, reinsurance programs shift the cost of care to a third party that may include the state or a reinsurance provider. States like Arizona, Idaho, Massachusetts, Connecticut and New York have reinsurance programs for small businesses.
Small Group Health Insurance: Get Quotes
· Decide whether you want an HMO, PPO or POS for your employees.
· Search for a service that provides free quotes from reputed insurance providers like Kaiser Permanente and Aetna.
· Contact the insurance companies directly and speak with their representatives. Conduct online research and find the contact information of appropriate insurance providers.
· Ask other business owners about their insurance plans and contact their providers for a quote. You are more likely to get a clear picture of which provider you would shortlist and which you need to steer clear of.
[break]Small Business Health Insurance
One of the most vital and complex decision points for a small business is health insurance. For any small business, health insurance can add to costs significantly. Thus, many businesses look for the cheapest solution. However, the pursuit of a cheap (or cost effective) solution sometimes leads to small businesses falling into the trap of fake insurance policies.
Small Business Health Insurance: How to Spot a Fake
If a health insurance plan sounds too good to be true, then it probably is. Fake insurance plans typically have premiums lower than the current market rates, which otherwise would put a legitimate provider out of business. Also, fake insurance providers tend to accept everything into the plan without any questions asked. On the contrary, a legitimate provider would typically ask you a lot of questions ranging from the number of employees to claims covered. Another red flag you should watch out for is the provider’s documentation. If it looks vague, consult a legal professional, and stay away from the provider if things are not 100% clear.
If you are suspicious of the legitimacy of a provider, here are some steps you can take:
· Never sign anything till you are absolutely confident of doing business with someone. Look for transparency and clarity.
· Get in touch with your State Commissioner of Insurance and confirm if your health insurance provider is legitimate and is authorized to operate in your state. This step is a great way to determine if the provider is fake or not, as most fake providers avoid procedures like licensing and registration.
· Conduct a reference check of the provider. Check with the business community about the reputation of the provider. Conversely, if the provider refuses to give you any reference, chances are high that something is fishy.
· If you are still unsure of the credentials of the provider, contact the local or regional small business association. These bodies have a list of blacklisted providers compiled over time, following inputs from other business owners in the industry.
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Health Insurance for Small Business: Tips to Reduce Costs
As a small business owner, keeping your employees healthy is a great way to cut down on insurance costs. Take a leaf out of Motorola’s book where the company has a wellness program to manage diseases by offering flu shots, smoking reduction sessions and cancer screening. This program resulted in cutting down insurance costs by almost 400%. Similarly, Caterpillar Inc estimates to save $700 million by 2015 through its wellness program.
Asking your employees to contribute more to the insurance plan is another tip to cut costs. Albeit not the most popular reduction method, employees may discard dental and vision insurance to save on contribution costs.
Consider opting for a group insurance plan that covers businesses that have 20 to 50 employees on their payroll. The larger the group, the smaller your per head premium will be. If your firm employs less than 10 people, you can still tie up with other businesses to expand your group plan.
Health insurance for small businesses is a large and competitive market. So, a due diligence goes a long way in cutting down your eventual insurance costs. A good place to start is the internet. Additionally, seek advice from industry professionals on what and how they pay towards their employee health insurance. Also, visit insurance agents so they can investigate insurance plans for you. Either way, a thorough research can do wonders in lowering your health insurance budget, while at the same time, keep employees happy.
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