How to Afford Health Insurance for a Small Business

Most small business owners struggle to afford health insurance for themselves and their employees because they don't have the staff that insurance companies require to ensure eligibility for the best rates. However, it is possible to find affordable health coverage for your small business.

Difficulty:

Easy

Instructions

1. Collect information about each employee concerning the following: age, workplace, occupation, health condition and tobacco usage. Most insurance providers will request this information before providing you with a quote. If you and most of your employees are in good health, the cost of your insurance may drop.

2. Decide which type of insurance you want to offer your employees. Some small businesses offer their employees dental and vision coverage as well as standard health insurance. Others go with minimal coverage.

3. Find out the portion of your employees' premiums your state expects you to pay. Most states set a minimum percentage, but the exact percentage varies by state. Some employers choose to pay more than the minimum.

4. Determine the average premium that your employees can afford to pay. You may need to discuss the matter with your employees. If they cannot afford the health insurance you offer them, you will have gone to the expense of setting up the program for nothing.

5. Work with other small business owners to obtain a group rate. Either through a professional association or by forming your own group of small businesses, you may be able to qualify for a group rate for health insurance.

6. Learn about alternatives to traditional health insurance. For some types of employees, health savings accounts may be more practical than health insurance, especially if insurance coverage is difficult to afford in your industry.

7. Contact your insurance agent or broker to determine whether the insurance company you typically deal with offers a health insurance plan targeted towards small businesses. Some insurance providers work with small businesses to help reduce the cost of insurance.

Tips & Warnings

• You can contact multiple insurers and request quotes. It may be easier, however, to work through an insurance broker because he may be able to help you find a wider variety of acceptable plans.

• If you plan to increase the number of individuals employed by your company, figure those numbers into your calculations when selecting a health insurance plan.