Choosing a healthcare plan for a small business is a daunting task when you’re just a small company. In this guide, readers will learn about small business health insurance requirements, low-cost employee healthshare plans, and other ways to choose the best small business healthcare.
Understanding Small Business Health Insurance Requirements: Do I Even Need to Provide Health Insurance to My Employees?
If your company has 50 or fewer employees, then you are not required to provide access to a group healthcare plan. Larger companies pay a significant tax penalty if they don’t offer insurance, but small companies have a little more freedom.
However, small companies that decide to offer insurance anyway can qualify for the Small Business Healthcare Tax Credit. This can be worth up to 50% of your employee contribution, making it possible for even the smallest companies to provide a health benefit.
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What is Health Share for Small Business?
Healthcare Sharing Programs are another viable alternative for small companies that want to establish an employee health benefit. Healthshare organizations, or HCSMs, aren’t insurance companies. Instead, they are private, membership-based organizations that share the cost of medical expenses.
Healthshare plans for groups have a number of advantages over traditional insurance, including:
- Lower premiums than unsubsidized plans
- The employer can decide how much to contribute, from 0%-100%
- Group healthshare plans are easier to administer than insurance
How Does Healthshare Work?
All members submit a monthly contribution to the health sharing community. These funds are held in sharing accounts and automatically transferred to other members in need. Similarly, when you experience a qualified medical expense, the costs will be shared by other members of the community.
Like insurance plans, health sharing requires that members pay a certain amount towards medical care before the plan kicks in. For healthshare plans, this is known as either the Initial Unshared Amount, the Annual Household Portion, or something similar.
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Checklist: Choosing a Healthcare Plan for Small Business
Trying to decide what the best healthcare option is for your small company? Ask yourself these questions:
- How much do I want to contribute towards an employee health plan? If your business has 50 or fewer employees, then you can choose to pay anywhere from 0% -100% of your employees’ monthly costs, whether it’s insurance or small business healthshare. However, if you’re choosing insurance and you want to qualify for tax benefits, you’ll need to contribute at least 50%.
- How much do my employees want to pay per month for their coverage? Group health insurance premiums are usually more affordable than an individually purchased plan. But some of the lowest rates can actually be found with health sharing plans.
- Do my employees have any unique or specific health needs that should be considered? If the people on your team have existing medical needs, you can keep this in mind when shopping for a plan.
Learn More About Employee Healthshare Plans / Healthcare Plan for Small Business
Your HSA for America Personal Benefits Manager is an expert at healthcare solutions for small businesses. With a short, no-fee consultation, you’ll be familiarized with your options, then empowered to choose the one that works best for your operation.
E-mail your Personal Benefits Manager to get started, or give us a call at 800-913-0172. You can also click here to run an instant quote for a small business healthshare plan.
Here are some additional articles on healthsharing programs: MediShare Review: MediShare vs. Zion Health | 3 Things All Business Owners Should Know About Small Business Healthcare
Here are some additional pages related to this article: Everything You Need to Know About Health Sharing Plans for Small Businesses | The Complete Guide to Health Reimbursement Accounts for Small Business