Becoming a new business owner comes with a slew of new responsibilities, outside the work you do. You’ll be making decisions about hiring, training, delegating, managing and empowering your team, as well as finding the right benefit solutions for your employees.
One of the key benefits you’ll need to explore is health insurance. As a start up, you have plenty of options to choose from, depending on the size of your business and your needs. Consider the following tips when deciding on your health insurance offerings:
Understand the Benefits of Benefits
With less than 50 employees at your startup, you may be eligible for small business health insurance. And while you aren’t legally required to offer it to a team of 50 or less, you may still want to consider finding a group plan. In addition to attracting and retaining quality employees, group health plans also offer guaranteed acceptance for your employees and their families. This means you’ll be able to protect yourself and your own family as well.
Consider the Cost
The cost of health insurance varies depending on the plan you choose, your location and your employees’ coverage selections. You can get a baseline for your cost by comparing different metal levels for each plan — such as bronze, silver and gold. These levels will help you understand each plan’s actuarial value (AV), or the percentage of total health costs that will be covered by the insurance company, on average.
Lower-tier plans cost less to your company and to your employees. These are helpful if your team is relatively young and healthy, as they have lower monthly premiums but higher deductibles and out-of-pocket costs. However, you may want to consult with your employees to see if anyone with chronic illnesses or more medical needs would benefit from a lower deductible option as well.
If it doesn’t make sense for you to offer a group health plan for your employees, due to cost sharing or other factors, there are still alternative options to keep yourself and your team protected. Depending on the size and overhead cost of your company, it may be more beneficial for your employees to seek out individual or family health insurance on their own. They may receive more personalized or affordable coverage this way. It all depends on the budget your company has to work with and your team’s unique needs.
Think about the Types of Coverage you Want to Offer
Once you establish a baseline of costs associated with your group health plan, you can determine which types of coverage your employees will choose from, such as a Preferred Partner Organization (PPO) or a Health Maintenance Organization (HMO). Each plan functions a bit differently and has its own benefits to consider.
As a startup, you can also look into other types of insurance plans, like Exclusive Provider Organization (EPO) plans, Point of Service (POS) plans, Health Savings Accounts (HSA) or Health Reimbursement Arrangements (HRAs). Between access to specialists, out-of-network coverage, tax advantages and saving ability, there are plenty of options to discuss with your employees or advisory team before making your decision.
Pick a Provider that Works with You
All of these decisions can get overwhelming, but you don’t have to navigate them alone. Reach out to a local insurance agent and discuss your business, your priorities and your health plan options. When selecting an insurance broker, consider their ability to give you sound advice, as well as convenience.
If convenience is your priority, start by looking into benefits programs offered through your payroll provider. Your employees’ personal and payroll information is likely already in their database, and they will be informed when you onboard new employees. If you, instead, need advice and guidance on how benefits work and which plan to select, a traditional broker may be a better fit. Talk to others in your network to get a referral in your region.
Selecting a group health insurance plan for your startup is a very subjective decision. There is no one-size-fits-all answer, so consider every angle before making a decision for you and your team.
