As a small business, determining what type of health insurance plans to offer your employees can be complex. Besides salaries and wages, health insurance costs are often a small business’s biggest expense. There are strict laws under the Affordable Care Act that require certain companies to offer health insurance to their employees and what those plans must cover. Understanding what type of health insurance coverage your business should offer can be tricky.
Every business is different, and what might be the right fit for one company will not work for another.
If you know you want to offer health insurance to your employees but aren’t sure what level of coverage is best, here are a few questions to help guide you:
What Are Your Business Demographics?
If most of your employees are young, unmarried, and don’t have children, they are less likely to need a higher quality coverage, which will cost more money. They might be content with only a high-deductible health plan and access to an HSA or rarely use their coverage altogether.
If most of your employees are older and have families, they’ll likely expect access to higher-quality health insurance plans with more extensive coverage.
If your employee demographics range in age and marital/family status, offering access to a variety of higher and lower coverage options.
What Are Your Competitors Offering?
According to a study conducted by Justworks, 88% of respondents said the quality and options of health benefits were essential to them when weighing a job offer. However, only 41% of employers surveyed offer health insurance as part of their benefits package.
Health benefits are a competitive way to retain and recruit top talent. If you’re not offering access to health insurance to prospective employees, you could be falling behind in the game. Some companies will completely cover health insurance premiums as a way to entice new recruits.
It’s not always financially possible for a small business to provide such generous coverage options. Still, suppose you have a sense of what your competitors are offering. In that case, you might consider offering slightly more to give your company an edge, like covering 65% of a plan’s premium instead of your competitor’s 60% offer.
What Can You Afford?
This is what it all comes down to for many small businesses. Knowing your demographics and competition doesn’t really matter if you don’t have the budget available to pay for health insurance.
While the Affordable Care Act mandates that employers of a specific size offer affordable health insurance, it doesn’t require that employers pay for 100% of the costs. If funds are tight, you may only be able to offer a high-deductible plan for your employees but could help sweeten the deal by contributing or offering something else. Start by calculating what you can reasonably afford, and go from there.
Cosmo Insurance Agency is a full-service independent insurance agency based in Hackensack (Bergen County) and Lakewood (Ocean County), New Jersey that offers an all-encompassing range of insurance options for both individuals and businesses. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating our knowledge of the insurance guidelines for healthcare, employee benefits, life insurance, self-insurance, dental, disability, and long term care insurance, we keep our clients up-to-date with affordable plans that cover all their specific insurance needs.