5 Tips To Help You Start Offering Health Benefits at Your Small Business

5 Small Business Health Benefits Tips

Did you know that many employees accept job offers based upon the benefits they expect to receive? Health benefits top the list of what job candidates value and can significantly impact the hiring process. Group health insurance for small business needs and other health benefits can help your company attract and retain top talent to ensure its competitive edge. Starting a new benefits plan may seem daunting, but these five tips can help.

1. Understand Why Offering Health Benefits Is a Win-Win

In addition to helping small businesses attract talented and loyal employees, health benefits achieve the following:

• Better productivity and fewer sick days for employees who have access to preventative care and prompt medical treatments
• Insurance premiums and medical treatment that employees can afford
• Significant government tax incentives for businesses that offer health insurance
• Financial savings for employees who use pre-tax dollars for premium payments

2. Do Your Research Carefully

Medical insurance is the most significant health benefit your business can offer, and researching the options starts with answering the following questions to narrow down your choices and make a decision:

• How many team members do you plan to cover?
• Will you offer coverage for part-time employees or dependents?
• What is the average cost of health insurance premiums in your area?
• What percentage of the cost can you contribute?
• How frequently does your staff travel internationally?

When you are offering health insurance for the first time, you may want to ask your employees what features they consider most desirable. For example, some team members may only benefit from policies that cover pre-existing conditions.

Your business's specific requirements and budget will help you choose from these three available options:

Group Health Insurance for Small Business 

This health insurance option draws from a pool of participants from multiple companies to create an economy of scale. Participating small businesses may enroll up to 50 employees, and at least 70% of their employees must opt for coverage. Family members are often eligible and help keep costs down. 

Premium rates remain in place for one year, despite individual employee coverage changes. After one year, a small business may opt to continue the same plan, usually with a premium increase. Premiums, deductibles, provider network, and prescription coverage may determine the health insurance plan a business selects. Optional vision and dental coverage, which medical insurance does not include, is also available.

Health Reimbursement Account

Qualified Small Employer Health Reimbursement Accounts can pay for participating employees' medical expenses or health insurance premiums. Employers fully fund these accounts and determine eligible medical expenses reimbursable through payroll transfers or payable at the point of service with pre-funded cards. After using their allotted funds for the year, employees must pay additional costs out of pocket. 

This option is available to small businesses with fewer than 50 employees that do not offer small group health insurance or flexible spending accounts. The funds are 100% tax-deductible for employers, and reimbursement is tax-free for employees.

Health Care Stipend

Small businesses with very few employees sometimes offer annual lump-sum stipends to cover medical expenses. This option essentially amounts to a pay increase or bonus without the tax advantages of traditional health insurance or HRAs. These funds are also subject to payroll taxes for employers and income taxes for employees. Employers can not guarantee that employees will use this benefit as intended. If they discontinue it, they risk inspiring resentment if employees equate losing the stipend with a pay cut.

3. Work With a Broker

Researching health benefits to offer your employees can be labor-intensive and take your focus away from your daily tasks. In addition, if you have no experience selecting benefit plans, you risk making costly mistakes. Working with a broker with the skills and expertise to understand your needs can ensure you comply with state and federal regulations without costing you anything. Instead, health plan carriers pay brokers' fees, and your company maintains a valuable partner for answering policy questions, negotiating with carriers, or helping HRA-enrolled employees choose individual health insurance plans.

4. Educate Your Staff

Employees will not appreciate the value or extent of their health benefits unless employers make them known and take the time to explain specific details concerning provider networks, deductibles, pre-approvals, telehealth options, and coverage periods. In addition, employees who recognize their employers' contributions and know how to get the most value from their health benefits have greater loyalty and goodwill for their employers than those who remain uninformed.

5. Consider Additional Health Benefits

Medical insurance does not include dental and vision coverage, which employees value, but these benefits cost very little to add to your health benefits package. Wellness benefits can also make a significant impact without breaking your budget and might include: 

• Distributing weekly e-newsletters with fitness tips
• Offering daily 15-minute walking breaks
• Closing early to accommodate a group trip to a nearby pharmacy for flu shots
• Giving employees personalized water bottles to encourage hydration

Are you ready to take your small business to the next level? Contact one of our knowledgeable brokers for help putting together a competitive health benefits package.