So you are shopping for a small business health insurance provider. For small businesses, it is specifically important to get a size-specific insurance coverage plan. As far as size-based health insurance coverage is concerned, the industry differentiates between individual/family plans, small business group insurance and large group health insurance.
Generally, a business qualifies as a small business for group insurance purposes, if it has 2-50 employees including owners and officers. The particular circumstances of this group make this distinction necessary. In the state of California alone, the distinction automatically entitles the group insured to three legal protections – guaranteed issue, guaranteed renewal and rates increase protection. Clearly, the size of your company defines the health insurance options available to you, as well as the rates you get given. With that in mind, you are in a better position to evaluate rate quotes and decide which group health insurance plan matches your group’s needs.
Group Health Insurance Quotes
Employer pays part or all of the cost of premiums for a group health insurance plan, while the final beneficiaries are the employees and their families. The best provider would be one that gives an employer a fixed budget for employee health benefit while providing each employee in the group complete flexibility to choose health coverage that matches their specific needs.
A provider may or may not look at the current health profile of your group in quoting rates. Often, they give you a rating based on its risk adjustment factor (RAF) calculation. The RAF is directly affected by the size of the group and it directly affects your premium rates. Basically, the larger groups get better RAF ratings which translate to discounts on premiums. In many cases, size is the single most relevant factor in group health insurance quotes.
Why Offer Group Health Insurance
Although in some states it is a legal requirement, group health insurance coverage for small business is often an employer-instigated benefit. From a financial standpoint, it is an expense item. But from a long-term business standpoint, this expense forms and intangible investment toward your human resources. Why does it make sense to offer group health insurance coverage to your people?
For one, it makes your business more competitive. After salary expectations, small business health insurance coverage is the top benefits employees look for in a prospective employer. If you offer a good package, you’re a step ahead toward attracting qualified, talented and motivated people to work for you and to stay.
For another, the employer’s share in the group health insurance premium is tax deductible, 100% in some states like California. While building a good employer-employee relationship with your staff, you’re also saving your business some money. That sounds like a win-win situation, doesn’t it?
Offering your employees group health insurance coverage not only boosts your business but improves its community image as well. Besides being an effective way to lure talent and ensure longevity, health benefits to employees give an otherwise inhuman business humane qualities of caring for other’s welfare. It inspires loyalty and hard work.
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The insurance industry is a risky business, seen on both sides of the fence. You risk giving your money to the insurance company in order to save you the possibility of having to spend an enormous amount of money when you get ill. The insurance company agrees to absorb some of your risk in the hope of making it insignificant to their pockets by spreading it and playing with probabilities. Not even investment banks take as much risk in their business as insurance companies do.
That being said, it becomes obvious that the choice of health insurance provider is an important economic decision families and small business share. How do you go about deciding which company to trust and what is the best way to obtain a small business health insurance quote? With your employees in mind, here are some helpful tips to help you select a health insurance company:
1. Know your employees’ health insurance needs. This is the ballpark for all health insurance-related decisions you make that affect your employee benefit plan. Do a survey of what your employees needs are. Be sure to also take background information, including family profiles.
2. Decide how much health care you’d like to provide for your employees. How much in aggregate premiums can you afford? Since health insurance is one of the crucial items in your employee benefit plan, the details pertaining to this decision should be viewed from various respects – your financial projections, employee longevity goals and productivity targets, as well as standard industry practices. These things can help you get a feel of what’s fair.
3. Request for quotes. After you’ve gathered and collated your employee data and have decided how much benefit you can afford to give, contact providers and request for quotes. They’ll package several options for you to choose from that substantially meet your requirements without exceeding your budget. Note that at this stage, one health insurance company can present you with several different options. Take those and compare.
4. Which your type of plan. You’ve got three basic group health insurance plans to choose from – indemnity plan, the health maintenance organization (HMO) and the preferred provider organization (PPO). Classify your quotes accordingly and see which type of plan gives you and your business the most benefits.
5. Request for competitive quotes and choose your provider. Once you’ve decided you want an HMO or a PPO for example, you can take the best package quote you’ve initially obtained and request for competitive quotes from other HMOs/PPOs. If you have a quote to begin with, some providers will match or exceed it to obtain your business. This saves you money on premiums without sacrificing the benefits.
Side Note
Selecting a health insurance company from a business standpoint should not be a daunting task. The kind of benefits your provide reflects how your business cares for its people; it pays to give this decision the consideration it merits. That means, it is equally important to do business with reputable firms. Make sure you are selecting a provider from a list of reputable health insurance companies. Stability is very important and where insurance is concerned, that’s the clincher.
Small Business Health insurance is one of the most important components of sound human resources management. Although that might sound like a big corporate principle, its basic truth applies to all businesses across various industries regardless of size or management style. Health is one of basic human needs heads of families seek to fulfill as they perform their jobs. Making sure your staff has excellent group health insurance coverage relieves them of a major stressor, thus making them better suited to be productive contributors to your business.
That being said, it’s important to review you choices for group health insurance. There are a multitude of providers in the market offering varied packages at different rates. You want to choose the one which suits your business needs and your employees’ needs without costing you an arm and a leg. What’s the easiest way to find out which best suits your small business? Multiple quotes.
Why Get Multiple Quotes
Easy comparison and evaluation are the best benefits of obtaining multiple group health insurance quotes. With the multiplicity of providers available out there and the various ways they package their insurance services, getting multiple quotes is the only sensible way to assure yourself you’re not missing out on better deals. Here’s how you could use multiple quotes to find the best group health insurance package:
1. Survey your employees to determine background and family profile and find out what their overall health insurance needs are. To need to have a clear picture of the need before you can look for a solution that matches those needs point by point.
2. Send out request for quotes. Now more than ever, this is very easy to do. You can either send out multiple email requests or use online resources to request for multiple group health insurance quotes. You don’t even need to personally speak with an insurance agent yet. But if you choose that route, that would also work.
3. With the needs list and the various quotes on hand, draw up a list of criteria to evaluate your choices with. Using rows and columns and a rating scale can help speed and ease things up some more. Also, writing things down makes it easier to see where and how you’re basing decisions on.
4. Evaluate first quotes individually using your criteria. Take out the best quotes, three if you like, then request your top choices for competitive quotes. Insurance companies willingly match or even exceed the best quotes you get, as much as feasible, in order to get your business. By all means, have them compete for it and get the best group health insurance quote you can possibly be given.
Competition is good for consumers. And yes, most businesses, including insurance companies, would compete for your business. That puts you at an advantage in the selection of provider as it gives you some leverage in negotiating a deal. Doing your homework and knowing what you are up against is the key.