As a small business, understanding the cost of health insurance can help you enroll in the most competitive benefits package to attract prospective employees.
In this article, we’ll discuss the factors that influence the cost of small business health insurance to help you make the best decision for your company.
To learn more about employee benefits packages for your small business, contact Cosmo Insurance Agency today.
What Is Considered Small Business Health Insurance?
Small business health insurance is for companies with anywhere between 2 to 50 employees. You are considered a large business if you have more than 50 employees.
The average cost of small business health insurance is typically around $500 per individual. However, with rising costs across the industry, we’ve made the decision to lower our rates to approximately $330 per individual—while still offering excellent plan designs. Our goal is to give small businesses access to the kind of benefits and pricing usually reserved for larger groups.
Employer vs. Employee Contributions for Small Business Health Insurance
In the small business market, employer contributions typically start at 50%. Offering less than this is generally not competitive in today’s landscape. As brokers, we analyze industry benchmarks to ensure your contributions align with market standards.
For instance, if you’re in the manufacturing industry, we compare your offerings with similar businesses to help you stay competitive and retain employees. After all, one of the biggest concerns for any employer is losing talent to competitors.
While 50% is the minimum, the most common employer contribution is around 75%. Additionally, contributions vary based on coverage tiers, such as individual employees, couples, parents, children, and families. Through our benchmarking process, we provide insights into what other industries are offering, giving you the data needed to make informed decisions and remain competitive.
Factors Impacting the Cost of Small Business Health Insurance
The good news is that small businesses now have a wide range of health insurance options to choose from.
For large groups, premiums are typically based solely on claims history. However, as a small business, you have more flexibility. You can opt for a traditional fully insured plan, explore medical underwriting, or even leverage your group’s claims data to secure the best possible rates.
Even if your employees have high claims costs, standard rate protections are in place. Additionally, we can facilitate medical underwriting to tailor your plan more effectively. This can be done through a simple medical questionnaire completed by employees or through backend underwriting, where the insurance company utilizes GRX (prescription history review) to assess risk.
With so many options available, it’s essential to take advantage of every opportunity to optimize your coverage and costs.
How To Reduce Small Business Health Insurance Costs
Exploring medically underwritten health insurance options is a crucial step for small businesses seeking competitive coverage.
Rather than relying solely on traditional plans, consider alternative solutions that go beyond simply adjusting deductibles and co-pays each year. Many small businesses are unaware of the more cost-effective and comprehensive options available in today’s market.
Even with as few as five enrolled employees, you may qualify for plans that leverage GRX (prescription history review) for medical underwriting. This process is conducted seamlessly in the background, eliminating the need for employees to complete medical questionnaires while still allowing you to access more tailored and potentially lower-cost coverage.
Benefits of Offering Health Insurance for Your Small Business Employees
Providing health insurance for your employees offers multiple benefits, including improved employee well-being, valuable tax advantages—since premiums are deducted pre-tax—and increased retention rates. A strong benefits package not only helps attract top talent but also ensures long-term employee satisfaction and loyalty.
Health insurance remains one of the top concerns for job seekers. The first questions potential employees ask often revolve around coverage details: “How much will my health insurance cost?” or “Will my employer cover 50%, 75%, or even 100%?” Offering a competitive benefits package can make all the difference in securing and retaining the best talent for your business.
Enroll in Small Business Health Insurance with Cosmo Insurance Agency
If you’re looking to provide health insurance benefits for your small business employees, Cosmo Insurance Agency is here to help. Our experienced brokers analyze industry benchmarks and competitor offerings to ensure you secure the most competitive benefits package—helping your business stand out and attract top talent.
Contact Cosmo Insurance Agency today to explore your options and enroll in a small business health insurance plan that strengthens your company’s appeal to prospective employees.
