Small businesses CAN access quality employee benefits!

When you’re operating a small business, it’s often all hands on deck at all times. Your employees are your biggest asset. They work hard to keep your vision afloat and what better way to show them how much they’re valued than with quality, affordable benefits. You know they deserve it, but as a small business owner, you also know you could never afford competitive benefits packages like the “big guys”. This is FALSE. Small businesses are an underserved market when it comes to the employee benefits landscape, but that doesn’t mean that good benefits options don’t exist. In this article, we will walk through the reasons many small business owners are under the misconception that they don’t have access to quality insurance packages. We will also touch on some of the insurance options small businesses can take advantage of to get access to the benefits packages they know their staff deserve.

The Target Market

One of the main challenges for small businesses regarding employee benefits is that insurance agencies typically focus on mid to large sized businesses. The majority of national insurance agencies are unwilling to provide benefits to clients with fewer than 25 employees. This leaves a significant portion of the market almost completely untouched. In instances where small business clients are accepted, it's often by an agency with limited experience offering a limited range of carrier options. This brings us to the next issue of census data analysis.

Census

Before the quoting process begins, insurance companies use an “employee census” to get detailed information on all the employees at an organization. This census is crucial as it enables insurers to estimate the expected healthcare costs for a group. In the case of small businesses, it is particularly important to utilize the census to explore alternative coverage options instead of adopting a generic approach. Because each business and group of employees is unique, it’s logical that their insurance needs and methods of obtaining coverage will vary. Unfortunately, finding a knowledgeable expert to direct your small business in the right direction can be challenging.

Lack of Knowledge?

Being a part of an underserved market means these business owners have little to no guidance from an insurance expert to point them in the right direction. It’s a vicious cycle of “you don’t know what you don’t know”. Businesses are unaware of their available options and can't make informed decisions. As a result, business owners often wrongly assume that they have limited options. Without the guidance of insurance professionals, they can remain unaware of the full range of coverage solutions available to them.

The Solutions

Brokers: To find suitable insurance coverage for your small business, look for insurance agencies that service large companies and have a dedicated small business department. Going with an agency that serves larger companies indicates they have the knowledge and experience you’d want in an expert as well as access to a wide variety of carriers. The range of carriers is crucial because this is how you get more quoting options.

Association Plans: An association health plan is formed by a group of employers who want to offer health insurance to their employees. This group is made up of multiple employers (including self-employed individuals) with the intention of increasing the number of participants in the group so that they can qualify as a “large group” health plan. For example, 15 employers with 10 employees each, all go on an association health plan together. They will get a much more competitive rate with 150 employees collectively than if each individual employer tried to insure their 10 employees.

Closing

Finding quality insurance benefits for your small business is by no means impossible. Generally, group health insurance is the first priority for employees and the second largest expense for employers behind payroll. Competitive benefits packages also help your business attract, hire, and retain top talent. While it may require a little extra time and effort to find the right health insurance package for your small business, it’s well worth the extra effort in the long run for you and your staff.