Small Business Health Care Solutions

One of the biggest challenges facing Small Businesses is Health Care. If you are a small business owner, this is not news to you. This article is not meant to state the obvious, but to introduce you to an option you probably didn't even know you had.

Most business owners think they have two choices when it comes to offering health benefits to their employees. The first choice is to partner with a payroll service (or company) and offer a blanket group plan (ACA plan) to only eligible employees. This option is expensive for both the business as they are required to pay a minimum of 50% of the premium and the employee if they add family coverage as they would likely be paying 80% or more of this added premium. In this situation it puts financial stress on the budget as well as stress on the employee if the premium cost is outside of their respective budget. The second choice would be to not offer health care benefits at all.

There is good news! A better option exists. Small businesses can offer health care as a fringe benefit (ref. IRS Publication 15-B). In this scenario, the business would partner with an agent, determine contribution amounts they are comfortable with and then allow their employees to pick there own plan. Everyone wins! Why? The business is immediately in a better financial position and can offer access to health care benefits for all employees; not just full-time or eligible employees. The employee is better off as they can pick the plan that fits their need and budget. Many plans are not bound to an open enrollment period and if they leave there is no COBRA, therefore less of a price increase to their plan.

Best of all the total cost of this option is typically much less than your traditional group plan - savings of 20% or more are common with clients I have worked with. This savings can be greater for the employee if they are young, healthy or choose a plan excluding unnecessary benefits.

These are just a few of the benefits the business and employee gain from a fringe benefit health benefit plan. Hopefully, this information has opened your eyes on how you can improve your cash flow and be more fiscally responsible while still providing great benefits to your employees.

I would love to hear from you if you have questions or need more information about fringe benefit plans for your business.

Blake Terry, Licensed Agent | Terry Family Insurance