How to Get Health Insurance for Your Small Business

Just because a business only has a few employees, that doesn’t mean that some sort of group health coverage is out of the question. In fact, many health insurance providers will work with companies that have as few as two employees to come up with a viable coverage plan.

How Does an Employee Health Insurance Plan Benefit the Business?*Increased Productivity. By providing group insurance to employees, productivity is kept high in two different ways. First, employees aren’t out of work as much, since they are receiving consistent medical care at an affordable cost. Second, employees are less likely to come to work while they are sick and not getting much done while there. A final indirect benefit is that providing insurance sends the signal that you value your employees, which in turn motivates them to do a good job.*Decrease Employee Turnover. Losing valuable employees to the competition hurts your company. When employees have a decent benefit package that includes group health insurance, they are less likely to stray. You get the benefit of fully trained employees while keeping the costs of training new people to a minimum.

*Better Coverage for Your Employees. Even if your employees can qualify for individual health plans, chances are a group plan will offer better deductibles and coverage overall. As a result, they have coverage that comes with less out of pocket expense, something that makes everyone happy.

Qualifying for a Group Health Insurance Plan

In many locations, there are at least a couple of health insurance providers who will extend group benefits to companies that have a minimum of two full-time employees.

Evaluating the Cost

Managing the insurance premium is crucial to the success of an employee insurance plan. If the goal is to provide the coverage for the employee at no charge, ask about plans providing adequate coverage for the lowest premium possible while still calling for reasonable deductibles. If the goal is to provide family as well as employee coverage, focus on plans with adequate coverage, reasonable deductibles, and a premium that the employee and employer can split. The employee share can be withheld from his or her wages or salary, then forwarded to the insurance provider with the employer’s share of the premium.

Finding the Right Small Business Health Insurance Provider

1. Gather Company Data Needed for Insurance Applications

  • The zip code for the company headquarters
  • Number of employees for inclusion in the group plan
  • Scope of coverage (health, vision, dental, etc)
  • Historical data related to the company, such as founding date and number of years in operation
  • Business Name, including and DBA names
  • Company SIC Codes
  • Data on employees who will enroll, including full names and birthdates. When family coverage is part of the plan, also include information on other dependents, such as spouses and children
  • Contact email address and mailing address for the employee who will function as the plan administrator

2. Identify Possible Partners and Collect Quotations

Do Online Research to Find Insurance Providers Offering Coverage in Your Area

  • Visit the department operated by the state to determine which insurance providers are certified to provide coverage in your area.
  • Contact each provider and provide basic details in order to secure a quote
  • Evaluate each quote based on scope of coverage, deductibles, and the premium

Go Through an Insurance Broker

  • Provide basic detail and review each quotation provided through the broker.
  • Keep in mind some providers will not work with brokers, so the returns may be limited
  • This approach does offer the benefit of not having to use company resources to research potential insurance partners.

3. Make a Final Selection

  • Review all quotes along with any references or other research into each of the candidates.
  • Identify the provider offering the best range of benefits for the best possible price.
  • Make contact with the provider and arrange to meet with an agent in order to activate the plan.
  • Sign the insurance contract and submit the first premium payment.

General Tips:

Choosing the right health insurance provider for your small business is not just about figures and costs. Also take the time to evaluate each candidate on:

Quality of Service. This means efficiency in processing claims, the ability to reach customer service when and as necessary, and accuracy in posting premium payments to the account. Most providers will assign a contact to each client; make sure that contact is knowledgeable about type of group coverage you have, is available when you have questions or concerns, and in general can support you in the management of the insurance plan.

Reputation. Always go with a provider who has a reputation for honest and integrity. While this may mean paying a little more in the way of a monthly premium, it helps to avoid the frustration of having to push for benefits to be paid or claims to be processed in a timely manner.

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SMB Reviews
SMB Reviews 473 posts

SMBReviews is committed to providing small and mid-sized business owners with the information and resources they need to select the best service or product for their company.

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