Q: What are the best small business healthcare options?
Navigating the jungle of employee benefits can be a daunting challenge for small business owners, no matter if the decisions involve a sole proprietorship or a team of several employees. First and foremost, it should be noted that employer sponsored healthcare coverage is optional for businesses with 50 or fewer full-time employees. As the owner, you have a wide range of choices about how to offer these benefits to your staff. The landscape of available options can differ from state to state, so let’s start with the basic types of health insurance providers.
Healthcare options for Small Business Owners
For you and your family
If you’re self-employed with no other full-time staff, you can get individual coverage through the Health Insurance Marketplace and consider the potential advantages of a Health Reimbursement Arrangement (HRA).
For 2-24 employees
Beyond coverage for sole proprietors, there is the federal government’s Small Business Health Options Program (SHOP) for small business health and dental insurance. If you have fewer than 25 employees, contribute to the premium cost for your employees, and meet eligibility rules, you may qualify for the Small Business Health Care Tax Credit when purchasing SHOP insurance. Business enrollment is available throughout the year without “Open Enrollment” limitations, although individual employees can’t join the plan after the initial enrollment period unless they are new hires and qualify for the special enrollment period.
For more than 25
You can also consider working with a Professional Employer Organization (PEO) to manage employee benefits for your workers. A PEO allows employers to outsource basic staff management functions, including hiring, employee training and risk management. If you are seeking guidance with your healthcare options, a PEO offers support for that as well. When deciding where to turn for help, shop competitively for the right company to provide this service.
If you want help with your small business employee healthcare decisions but don’t want support for other functions, you might be interested in working with an insurance broker. The average cost of this service is hard to pin down since the premiums vary considerably. What you will get in return for your service premium usually includes personalized interactions with your staff, including enrollment workshops and follow up consultations. Be careful when looking for the lowest cost provider, as they may have an affordable price point because they serve an unusually high volume of clients. That means you may end up without the personalized service you had expected.
As a small business owner, it can be difficult to navigate how to find affordable health care or insurance for yourself and your employees. If you find yourself struggling to figure out how to pay for health care or budget for your own expenses, I would recommend talking to a certified small business counselor from an NFCC member agency. Counselors can help you budget for all your expenses and create a strategy to make the most of your hard-earned money!
Bruce McClary is the Vice President of Communications for the National Foundation for Credit Counseling® (NFCC®). Based in Washington, D.C., he provides marketing and media relations support for the NFCC and its member agencies serving all 50 states and Puerto Rico. Bruce is considered a subject matter expert and interfaces with the national media, serving as a primary representative for the organization. He has been a featured financial expert for the nation’s top news outlets, including USA Today, MSNBC, NBC News, The New York Times, the Wall Street Journal, CNN, MarketWatch, Fox Business, and hundreds of local media outlets from coast to coast.