How Much “Should” Small Business Health Insurance Cost?

Shopping for a small business health insurance plan is often challenging. The marketplaces are large, and individual plans include complex terms and conditions. Some employers opt for the help of an insurance agent in choosing their plans. Discover the best practices for selecting the right plan for you and your employees and answers to frequently asked questions about purchasing health insurance for small businesses.


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Adopting a small business health insurance plan

As a small business owner, finding high-quality and affordable health insurance and dental plans for your employees can be a difficult task. Small businesses with under 50 employees aren’t required to supply insurance plans, but many choose to to attract talent and take care of their employees. Those that do often seek the help of an online insurance agent in selecting the best plans for their business. Licensed agents consider your personal needs and your budget and narrow down an assortment of quotes.  


Without an agent, some small business owners browse government-owned online shops on their own. These shops provide a very wide range of plans, but the balance between quality and price can be confusing. Choosing a plan on your own comes with a degree of risk if you’re unsure of what you’re looking for.

Related: How to Grow Your Business


Best practices for selecting a plan for your business

Due to the complex nature of health insurance shopping for small businesses, the following list provides helpful best practices for choosing well:


Read every summary of benefits

All insurance plans include a summary of benefits within the marketplace. This summary outlines a policy’s full benefits list, overall coverage and a glossary that defines related terminology. Included are details of each plan, cost-sharing and exclusions. The information provided within these summaries gives invaluable information on every plan, allowing you to compare them together and determine the best plans for your needs.


Conduct surveys

One of the best methods of selecting a plan for your business is by conducting employee surveys. Ask your teams what sort of coverage they’d like to have and what they’re willing to pay for it. Knowing this information greatly helps the selection process, as you understand exactly what your employees want.


Establish a budget

Plans come in a wide range of affordability. It’s not uncommon for the best choices to be more expensive than others. Before you seek out insurance plans, establish a clear budget. Determine a specific threshold that you know you can afford on a monthly basis, and look for plans within that range and below. Consider how much your employees are willing to pay as well. They likely won’t opt into coverage that diminishes a large portion of their income.


Consider out-of-pocket deductibles

Plans with lower monthly premiums often come with higher deductibles. Employees who don’t require a great deal of medical care throughout the year are usually more willing to pay higher deductibles. Those who have more health-related problems tend to prefer lower deductibles. Understanding your employee’s overall needs prepares you to make the best purchase decision when shopping for insurance plans.


Hire a licensed agent

Searching the insurance marketplace alone isn’t always the best option. Plan details are often confusing, and there’s a lot of pressure placed on those who want the best for their employees. In these cases, hiring a licensed agent is most beneficial. Let them know your unique business needs as well as the needs of your employees, and they’ll find a plan that best suits everyone. Agents understand the complex terminology within plan summaries and can better decide a plan for you.


Consider employee travel and country-wide providers

Some small businesses require their employees to travel frequently. If this is the case for you, then consider a country-wide provider. While traveling, employees may be subject to illness or injury. Having a plan that allows them to receive medical care across the country allows them to treat these problems as they occur. Some plans are only local and don’t provide benefits for travelers.


Consider health savings accounts

Growing in popularity due to their tax exemptions, health savings accounts (HSA) provide cost incentives for both you and your employees. Establishing an HSA requires you to have a high-deductible health insurance plan. Each year, employees decide how much they contribute to their HSA. They’ll receive a card or checkbook related to the account, allowing them to make tax-free contributions and withdrawals freely for medical expenses. These accounts mostly benefit healthy employees.

Related: Onboarding Best Practices


Small business health insurance FAQs

Here are answers to some of the common questions surrounding small business health insurance:


What are the requirements for opting into small business health insurance?

Although small business owners aren’t required to supply insurance to their employees, there are a few qualifying factors. For a business to provide health insurance plans, they need a maximum of 25 full-time employees and an average salary of $50,000 or less.


Where can I view my options for small business health insurance? is one of the most well-known option providers. They have plenty of helpful articles on getting started. You can even find out some of the specific rates for businesses within your area by providing your zip code. Some individual insurance agencies provide their own plans for businesses as well.


What can I do to improve the general health and well-being of my employees?

Some small business insurance providers have health applications that integrate with smart watches. They monitor the health applications on your watch, such as the heart monitor, and offer unique, personalized goals. Upon meeting certain goals, they even reward your employees with gift cards and similar items. These applications also provide daily motivation for meeting and exceeding goals, specific health challenges to improve eating and sleeping habits and even reminders for yearly health screenings, prescriptions filling and flu shots.


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