Under the Affordable Care Act, even small companies should be aware of their role in providing healthcare, including small business group health insurance. Our clients at Canal HR have a choice of several plans, including HMO, PPO, and traditional plans. Is small business group health insurance right for you? We can help you make this choice for you and your team.

What Are Group Health Insurance Plans for Small Businesses?

A group health insurance plan provides employees with health insurance coverage through their employer, who pays a portion of the premium. Because group health insurance plans provide employees with equal major medical coverage through a single policy, the cost of these plans is generally lower than an individual health insurance policy. If you operate a business with fewer than 50 employees, a small business group health insurance plan can help you and your employees stay healthy while paying less for care. 

What Is Major Medical Health Insurance?

Major medical health insurance is exactly what you think of when you hear “health insurance.” It generally covers serious illness and injury. To help you start thinking about small business group health insurance, we’ve outlined four major types of plans: 

HMO 

A Health Maintenance Organization is made up of multiple insurance providers that give members health insurance coverage for either a monthly or annual fee. With HMOs:

• Members must first seek care for any potential medical issues through their primary care provider (PCP), who can then refer them to other healthcare specialists, as needed. 
• Benefits will only apply if a member sees healthcare providers who have contracts with their HMO (also known as “in-network” providers).
• Premiums and deductibles are lowered by having members make co-payments (copays) on-the-spot for healthcare services.

As a group health insurance plan for small businesses, HMOs are great for minimizing healthcare costs and incentivizing employees to seek out preventative care services, such as annual check-ups. 

PPO 

A Preferred Provider Organization is a health plan that holds contracts with individual medical service providers (like doctors and hospitals) to create a wide range of care options. With PPOs:

• Members have the flexibility to see out-of-network providers while still utilizing a portion of their benefits. 
• You don’t need a PCP for specialist referrals. However, choosing in-network providers is still the best way to maximize your benefits. 
• Monthly premiums and copays are usually higher than with HMOs.

PPOs are a great group healthcare plan if your small business is willing to pay more for a wider variety of care options.

Traditional

Unlike managed healthcare plans like HMOs and PPOs, traditional plans generally require members to pay for services on-the-spot and later submit the bill to their carrier for reimbursement. With traditional group healthcare plans:

• Your premium is reset annually and is based on the number of enrolled employees for a given year. 
• The insurance carrier assumes the risk of payment for healthcare costs, though you must reach your deductible before you are eligible for benefits.
• The healthcare provider will often submit the bill directly to your insurer.

If your small business wants a group healthcare plan where medical costs are fairly easy to predict, with a wide range of healthcare providers to choose from, a traditional group healthcare plan could meet your needs.

What are the Benefits of Group Health Insurance Plans for Small Businesses?

There are a number of great benefits to offering small business group health insurance, including:

• Bringing quality candidates to your job search
• Improving employee retention, morale, and performance
• Tax benefits for small businesses

Are there Alternatives to Offering Group Health Insurance?

Yes, as a small business, you have some flexibility with the types of benefits you can offer your employees. There are individual health plans available for employees with no employer contributions required, and payments are made easy through payroll deductions. 

Talk to Us about Group Health Insurance Plans for Small Businesses Today

At Canal HR, we have a team of employee benefits experts who want to help your small business thrive. Contact us today for a free consultation and to learn more.