For finding the right coverage, some can use SHOP to source and sign up for employee health insurance plans. But, for others, it’s not as straightforward. While anyone can use SHOP, there are a few other options open to employers with 50 or more FTEs. Here are those options:
- Get some help and work with an insurance broker. If reaching out to insurance companies on your own seems daunting, don’t worry—you can ask someone else to do it. Licensed insurance brokers are a great resource for small business owners, and will greatly help you circumnavigate all of the paperwork and popular pitfalls of finding an employee health insurance plan. Intuit® has recently added this service as an add-on to its payroll offerings. By partnering with SimplyInsured, Intuit Payroll customers can choose to purchase this surface and work with licensed and knowledgeable insurance brokers. It’s all part of Intuit’s full-service small business solutions.
- Reach out directly to insurance companies. If you’ve had some experience with purchasing health insurance before, this might be your best option. Not all health insurance companies will work directly with businesses, but some do. Make sure to conduct due diligence and check out ratings on sites such as Consumer Affairs and the National Committee for Quality Assurance (NCQA). JD Power also publishes an annual ranking of the best health insurance options by state.
- Investigate the feasibility of partnering with a private health exchange. Also known as purchasing alliances or associations, working with one of these can help decrease overall costs. Here’s how they work: a bunch of small businesses interested in purchasing employee health insurance are grouped together. This allows businesses to increase their leverage and buying power by increasing their numbers. Working with a purchasing alliance is very beneficial for your employees—it gives them a lot more choices so that they can better tailor their health insurance plan to their needs. However, this option doesn’t offer any of the tax credits that using SHOP does.
- Consider using a Professional Employer Organization (PEO). PEOs are similar to purchasing alliances, in that they help to lower the overall costs of the healthcare benefits. However, PEOs also can help with additional information such as payroll management and tax filings. If you need help with some of these administrative tasks, working with a PEO might be the best option.
- Consider a Quality Small Employer Health Reimbursement Arrangement (QSEHRA), if you have less than 50 employees. A newer option for small businesses with fewer than 50 employees is to reimburse them for medical expenses and personal premiums through a QSEHRA. The benefit of these plans is that there are no monthly contributions for you—the small business owner.
Understand the cost to offer health insurance
Working with an insurance broker, PEO, or private health exchange will give you an easy way to determine your costs. These organizations will need to provide that information. Keep in mind that any amount you pay towards your employees’ health insurance plan is tax-deductible. So, it literally pays to offer your employees health insurance.
In general, most employers pay at least 50 percent of their employees’ health insurance premiums. And, since it’s tax-deductible and allows some small businesses to apply for a tax credit, paying this amount is well worth it.