•ᐉ【 How can a small business offer health insurance?
How can a small business offer health insurance, if you choose a group plan, consider the percentage of premiums you're willing to cover, whether you'll also cover your employees or their families, or whether you'll use the services of a third party to find coverage for you, since they also charge a fee.
But it also takes time to research and compare plans that meet your company's needs, educate your employees about your plan options, and manage the administrative burden of creating and maintaining the plans. And did we mention the paperwork? So much paperwork.
According to the Kaiser Family Foundation's 2022 Employee Benefits Survey, annual premiums for employer-sponsored family health insurance were $20,576 in 2022, up 5% from the previous year, with employees paying an average of $6,015 toward the cost of their coverage. The Wall Street Journal reports that employers pay 71% of these costs, while employees cover the rest. The average deductible for covered workers in a plan with a general annual deductible is $1,655 for single coverage.
Small businesses are the backbone of this country. They employ over 47% of the private workforce in the U.S., or 60 million people. Chances are, you're part of a small business. And as with many startups and small businesses, health insurance is likely to be a topic of conversation, with the cost of plans taking center stage.
At some point, every small business was in its place. They had to decide what to do about health insurance. According to the SBA, nearly 50% of small businesses with 3 to 9 employees offer health insurance benefits to their employees. About 71% of small businesses with 10-24 employees offer health insurance benefits, and 85% of businesses with 25-49 employees offer them health insurance benefits.
Will employers be required to offer small business health insurance in 2022?
While the Affordable Care Act (ACA) requires employers with 50 or more full-time equivalent employees to offer affordable group health insurance that includes essential benefits or pay a penalty, the ACA has never required small business owners to offer group health insurance to their employees. Under the ACA's requirements for employers, business owners with fewer than 50 full-time and full-time equivalent employees are considered "small businesses." So, if your business is classified as a small business, you have the choice of whether or not to offer group health
Should you offer group health insurance if you own a small business?
According to a 2020 Kaiser Foundation study, more than half of small business owners - 56 percent - offer group health insurance to their employees. While small business owners aren't required to offer health insurance, there's a strong case for them to offer group health insurance to their employees because it's a compelling value proposition for their employees and their business. Consider the following benefits:
- Retaining and attracting employees - Providing group health insurance can help your small business attract better employees while retaining your best employees. In a competitive talent market, offering health insurance as part of a compensation package can be an attractive incentive for employees to join your company.
- Help your company stand out from the crowd: Being among the 56% of small businesses that offer group health insurance can help you stand out as a responsible and accountable company. Employees often purchase group insurance, even if they have to pay a portion of the premiums themselves.
- Healthier workforce - When employees have health insurance, they take fewer sick days and can help your small business be more productive. Since your employees have access to numerous healthcare services, they can proactively take care of their medical needs without having to interrupt their work schedule.
- Save money - In many cases, the pre-tax benefit of a small business-sponsored health insurance plan can reduce your employees' tax burden, allowing them to take home more income. In addition, you may be eligible for a tax credit through the ACA's Small Business Health Options Program (SHOP).
Overall, offering group health insurance can be a worthwhile investment for your small business, even if you are not legally required to do so.