How to Get Health Insurance for a Small Business

Providing access to health insurance is a key benefit that most employers try to offer. It is one of the most important and sought-after benefits to potential employees. If you have a small business with 2 to 50 employees, obtaining health insurance can be difficult, however, there are ways to offer this benefit without going broke.

Difficulty: Moderate

Instructions

1. Determine your budget for providing group health insurance to your employees. Evaluate how much you can afford to contribute and also how much cost your employees will be able to bear. Seek advice from other small business owners who offer this coverage. Ask for input from your employees.

2. Verify your state's requirements for small business health plans. You can find this information by consulting the Healthy Access Database on the National Association of Health Underwriters website (see link in Resources) or by visiting your state's Department of Insurance website.

3. Understand that all group health plans are not created equally. You will need to research numerous companies to find a plan that will be a good fit for your company and for your employees. The Health Insurance Portability and Accountability Act of 1996 requires that insurance companies guarantee issuance of coverage, however, the rates and premiums can vary widely, depending upon the health risks of the small business employees to be covered. It may be best to get assistance from a health insurance broker to get the best group insurance for the best rate.

4. Research thoroughly any insurance company you may be interested in working with, to determine that it is licensed to sell insurance in your state and also to check its complaint record. When it comes to health insurance, bargain rates can unfortunately mean bargain services sometimes. You do not want to do business with a company that will deny claims on a regular basis and provide less than adequate customer service for your employees. Find this information by visiting the National Association of Insurance Commissioners website (see link in Resources).

5. Explore options for self employment insurance, if your small business only consists of you, or you and a partner (friend or spouse). Your local Chamber of Commerce may have a group plan available. Industry organizations and business associations also offer group plans that may be more reasonable than what you find on your own.

Tips & Warnings

• Check your state's "preexisting condition" requirements. Federal law allows group health insurance carriers to enforce a 6-month look-back/12-month exclusionary period for preexisting conditions for those employees who did not have creditable coverage prior to this policy. Individual states, however can choose to shorten this time period. Work closely with your employees to make this benefit viable. Brainstorm with them to find ways to make it work. Employees can offer cost-cutting solutions, ways to increase sales and productivity and other measures that can help your company afford the cost of the group health insurance.
• Failing to do thorough research can leave your company vulnerable to scams or less than favorable insurance carriers. Use a health insurance broker to protect your company and your employees.

Resources

• National Association of Health Underwriters
• State and Federal Requirements for Small Employer Health Plans
• National Association of Insurance Commissioners-State Insurance Department Websites