If you own and run your own small business with employees, or are just self-employed, you still need to know the options that are out there for health insurance coverage. Depending on which situation fits you, you’ll need to either purchase policies for yourself and any dependents, or provide a group plan for your employees.
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Unfortunately, the current economic environment is making it much more difficult for small business owners to purchase reasonably priced health insurance coverage for their employees. As small companies decide to do without health insurance, insurers are being forced to increase their rates in order to continue to profit from small business health insurance. Alternatively, they’re just cutting their losses and cutting their small business insurance offerings.
For instance, Empire Blue Cross Blue Shield in New York City recently let its insurance brokers know that the provider would be reducing its portfolio of health insurance plans for small businesses of 2-50 people. It also plans to ask New York state regulators for permission to raise the rates on its remaining policies.
Am I legally obligated to offer some type of health insurance coverage to my employees?
As with many other insurance guidelines, whether or not you are obligated to offer health insurance to your employees is regulated at the state level. Therefore, you need to check with your state’s Department of Insurance to find out the rules governing your business.
In Washington State, insurance for employees is not required for small business owners, but the state’s Insurance Commissioner’s website gives recommendations for small business owners that want to offer it. In Massachusetts, where it is required, the state government has been cracking down on insurance company rate increases for small group plans.
To find out what small business health insurance would be a good fit for your company, you should definitely talk to your local insurance agent. Figure out how much coverage you can afford to offer your employees, and the type of plan that would work for you and them. While health insurance may not be a legal requirement from the state in which your company is based, many employers still feel morally obligated to make health insurance a part of an employee’s work benefit package.
How do I get health insurance if I’m self-employed?
If you’re self-employed or an independent contractor, your best bet is probably to purchase an individual health insurance plan directly through an insurance broker or from a health insurance provider. If you’ve recently left a large company and are now working for yourself, or as a freelancer, just realize that individual health insurance plans tend to cost more than employer-sponsored plans because you no longer have the buying power of a group on your side.
Some independent contractors, if they work the majority of the time for a specific company, are able to purchase their health insurance through that company. If you do freelance work predominately for one business, working 20 or more hours a week, you should talk to that business’s benefits administrator to see if you can join their health insurance plan.
Another option is to seek out coverage through any of your associations and affiliations. For example, the college from which you graduated might have insurance plans for alumni. Groups like AARP and AAA usually have discounted insurance plans as well.
If I work for a company, do I have to subscribe to their health insurance plan?
This is one of those questions for which you should turn to an expert like your insurance agent or your company’s benefits administrator for more detailed advice. If the company makes subscribing to its health insurance plan one of the job requirements, then you’re obviously obligated to subscribe.
Unfortunately, if the company gave all of its employees a choice and only a few chose to participate in the health insurance coverage, then the rates would most likely be much higher. In order to keep the group rates low, the company would need all of its employees to participate.
However, if you or your spouse has insurance from another entity, such as your spouse’s employer, you can submit proof of insurance and have the requirement waived at your company. Your employer should be relieved that they don’t have to pay anything towards your healthcare costs if you have coverage elsewhere. In fact, some companies will award you with a one-time bonus just because they don’t have to foot any or your entire health insurance bill.
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