See how much a group health insurance plan can cost for your small business.
How much are health insurance plans for small business owners?
According to research published by eHealth in 2016, small business plans purchased through eHealth covered five people and cost $1,432 per month in premiums, on average.
This means the premium costs about $286 per person on average. An individual plan, on the other hand, costs about $393 on average based on buyer data from eHealth in 2016.
Breaking down the real cost
As the above statistics show, having a group plan rather than an individual plan can save costs on premiums. As a small business owner, it might seem like a lot of responsibility to get coverage for your employees, but there are ways to minimize costs and there might be tax credits that may apply to you.
The costs of health insurance plans – and for your business in particular – will reflect a lot of factors. A few of these include:
- Type of plan: do you want an HMO or a PPO? Read up on how these plans work, and you might find that one will be better suited to your needs than the other.
- Where and how you shop for coverage: you may end up getting a better plan for your needs if you take the time to research types of plans and compare using a health insurance broker like eHealth. Using a broker also lets you see plans from a variety of companies instead of just what one company has to offer.
- The ages of your those in your group, and where you are located. These factors can make a huge difference in how much you’re paying:
Because every small business is different, the “right” plan may not be the most inexpensive one. For example, some plans that have higher premiums might actually end up being cheaper for the people covered under your group policy when all the costs are considered. The best way to learn the specific costs of health insurance plans for small business owners is to start shopping and comparing plans available in your area.
Health insurance plans for small business owners: employer & employee contribution requirements
Some health plans will require you, as the employer, to cover at least half of your employees’ premiums. This is meant to encourage more people to sign up for the plan, and not just those prone to sickness—this is called adverse selection. This could work to your benefit, though, because the Affordable Care Act (ACA) offers a small business tax credit to certain employers with less than 25 full-time employees who pay at least 50% of employees’ premiums. This ACA tax credit is aimed towards lowering the cost of health insurance plans for small business owners.
So based on the eHealth 2016 report, the average group plan covering 5 people will cost about $17,184 a year. But this cost will be split between you and each of your employees, and on top of that, you might qualify for the ACA tax credit if you have fewer than 25 full-time employees, and pay for at least half of each of their premiums.
Health insurance plans for small business owners: why should you do it?
Although health insurance plans for small business owners might seem like a lot to handle, there are usually ways to save money and great reasons to provide your employees with health care. Visit eHealth.com to compare costs, and find a plan that may fit the needs of your small business.
Buying a particular plan at eHealth with the help of a licensed agent will never be more expensive than buying the same plan directly from the insurance company because insurance prices are fixed by law. But going through a licensed agent allows you to compare multiple plans from different companies to find the right plan to fit your small business.