Practical Advice for Starting and Operating
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4 Decisions You Have To Make When Picking Your Small Business Health Plans
by Royce Vangoff
As a business owner, providing small business health plans for your employees is a very important decision you have to make. The decision to have a health plan, however, is only the first step. There are other important decisions to make along the way.
• Decision 1: How much can you afford? Health plans are expensive, and as a small business owner you will likely be facing rising costs in insurance premiums. An average small business pays out approximately $1,500 per month per employee for a medium-level health insurance plan. As you have a need to hire more employees, keeping this number in mind is important. Thankfully, insurance premium payments are 100% tax deductible, but you're still paying money. You'll have to decide how much you can spend.
• Decision 2: How much will your employees pay for their insurance? On average, employers generally pay at least half of an employee's monthly premium. Whatever you don't pay for as a business, your employee will need to pay for personally. When it comes to dependents, there are other considerations to take into account. Will the business pay for a percentage of dependents' health coverage? Depending on the type of business you have, and the number of dependents your employees have, this is a crucial decision that could have a dramatic impact on your small business health insurance plan.
• Decision 3: What type of savings plan will you use? A Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA) provides an attractive way for you to save money as a business owner, and for your employees to save up for medical costs. Both HSAs and HRAs can help to lower your monthly premium costs, while still providing for employee coverage needs.
• Decision 4: What about covering additional health care needs? The more appealing your company health plan, the more likely you'll be an attractive employer. If you're part of an intensely competitive labor market, you'll want to offer more additional benefits to prospective employees. At the very least, it is wise to make supplemental health benefits available, even if you can't furnish the cost for all of them. Having an HSA available as an alternative supplement to health benefits is a great move as a cost saving measure on premiums and to attract new employees as well.
There are plenty of decisions to make when considering health plans, and these are only a start. These key decisions are not ancillary to running a successful business. They are crucial due to the nature of hiring and retaining personnel. Making smart moves on these key decisions about small business health plans will pay off in the long run.
The decision can be difficult when it comes to choosing between small business group health insurance
. RMHP offered Royce Vangoff some information on group health care
that helped him with his decision.
Article submitted Monday, June 25, 2012 & read 51 times.
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