Guide to Buying Small Business and Group Health Insurance Plans

As a business owner, you are probably familiar with the benefits that small business health insurance plans can provide for your company, employees, and even your own family. However, finding suitable health insurance options for your company and employees can be difficult. Insurance Shopping is here to simplify that process for you. This article will teach you several methods for finding the best group health insurance plan for your company’s unique needs.

Step 1: Determine whether your small business is eligible for a group plan

Eligibility requirements for small group insurance may vary slightly by state, but most regions adhere to federal guidelines. According to federal regulations, a small business is eligible for a group health insurance plan if it has: 

  • Two or more employees (including the owner) living in separate households
  • Fewer than 50 employees

Step 2: Determine to whom you are providing insurance

Typically, you are required to provide coverage to all the FTEs (full-time employees). Also, it might not be necessary to offer your plan to part-time workers or contract employees. However, some businesses provide group coverage to part-time or 1099 workers to help them qualify for employer coverage plans and, in some cases, for better insurance rates. 

Step 3: Determine the cost of small business health insurance plans for your company

Another essential prerequisite that you should calculate ahead of time is whether your company can afford group health insurance. A recent Insurance Shopping survey found that the average monthly cost for small group insurance is around $409 per person. Of course, factors such as supplier, benefit design, cost-sharing features like copayments and deductibles, and plan type can cause the actual costs to differ from the average values. 

Step 4: Evaluate group health coverage options

Small business group health coverage comes in a wide range of plan types, including PPOs, HMOs, EPOs, and HSAs. So, your priorities and preferences regarding cost, health coverage, and provider selection will determine which plan is best for your company and employees. 

Do you know what each of these options means? Each option for group health insurance is explained in detail below:

What exactly is an HMO plan?

An HMO is an abbreviation for a “Health Maintenance Organization”. An HMO program has a network of doctors, hospitals, and other medical providers. Members must use suppliers in the HMO network to receive plan benefits, except in emergencies or as approved by the plan. Otherwise, the beneficiary is responsible for covering the entire medical expenses. Another aspect of HMOs is the PCP, who provides direct patient care and recommendation to specialists within the HMO network. Each beneficiary selects the primary care doctor from the HMO network. Moreover, HMO plans are often an excellent option for individuals who want relatively low insurance premiums and out-of-pocket expenses. An HMO plan is likely to save thousands of dollars on healthcare expenses for your company and employees.

What exactly is a PPO plan?

A PPO is an abbreviation for “Preferred Provider Organization”. Members are not required to choose a primary care physician to manage their care. A PPO plan gives members more options when selecting their medical providers than an HMO plan because PPO networks are often larger than HMO networks. Typically, PPO plans pay a higher percentage of the “cost of care” received from online providers than from offline providers. Also, PPO plans pay a portion of the costs for covered medical services received from healthcare providers within or outside the plan’s network. PPOs typically have higher monthly premiums than HMOs, and employees usually pay higher out-of-pocket costs if they seek care outside the PPO plan’s network. A PPO plan may be the right choice for your company if you want significant cost savings and flexible access to suppliers of your choice. 

What exactly is an EPO plan?

An EPO stands for “Exclusive Provider Organization”. Like an HMO plan, EPOs only pay for covered services delivered by providers in the plan’s network. It differs from an HMO in that plan members are not required to select a primary care physician to coordinate their care. Moreover, EPOs do not necessitate specialist referrals. EPO plans may have lower monthly premiums than HMO and PPO plans, but they have a smaller network of participating providers. So, EPO may be a desirable health insurance plan option for small businesses and employees who value the cost-savings of a small network of medical providers without the HMO restrictions of PCP selection and referrals. 

What is a POS strategy?

A POS plan is an abbreviation for a “Point of Service” plan. POS plans combine the HMO’s coordinated care features with an HMO’s flexibility. Like an HMO plan, employees enlisted in a POS plan a select primary care doctor who will refer them to specialists within the plan’s network when needed. Members have low, out-of-pocket expenses for in-network care provided or directed by their PCP. Nonetheless, members have the option to self-direct to medical providers at any time and pay a higher portion of the cost for the care they receive. Those who allow their primary care doctors to coordinate their care within the plan’s network save a considerable amount of money on healthcare expenses. A POS plan may be appealing to businesses and employees who want the freedom to go out-of-network or self-direct to care while still receiving HMO-level savings for most of the care they receive. 

What is an HSA plan?

A “Health Savings Account,” or “HSA,” is a type of savings account used to supplement high-deductible health insurance plans. Members contribute pre-tax dollars to an HSA account to use the funds for future medical expenses. Money left in a tax-advantaged HSA account rolls over and can earn interest every year. When a qualifying high-deductible insurance plan is combined with an HSA plan, members pay their portion of medical care costs with pre-tax dollars and receive a tax credit. HSAs might be a good option for employers and workers who want the low monthly premiums of a high deductible plan and a savings account to help pay for medical care until their deductibles are met.  

What is an Integrated HRA?

An HRA, or integrated health reimbursement account, functions similarly to an HSA in that it supplements group health insurance plans. Nevertheless, it has a few key differences:

  • To qualify for tax benefits, an HRA needs to work alongside group health insurance that provides minimum essential coverage, as defined by the ACA.
  • An HRA account is funded entirely by the employer. While money in an HSA typically belongs to the employee, funds in an HRA belong to the company.

Step 5: Select the best carrier for group health insurance needs

After you’ve decided on the type of plan you want, it’s time to look at carriers. Insurance Shopping collaborates with the following top-rated health insurance companies that provide small business health insurance plans (as well as 70+ other suppliers):

1. Blue Cross Blue Shield

Blue Cross Blue Shield (BCBS) is one of the leading health insurance companies in the United States. The Blue Cross Blue Shield Association, which comprises independent, locally operated health insurance companies, provides health coverage to approximately 99 million people across all 50 states.

BCBS (Blue Cross Blue Shield) insures over 7 million small business employees. It is perhaps best known for its coverage types. Blue Cross Blue Shield plans include the following:

i) BlueCard PPO. It gives access to a national PPO network that covers approximately 96 percent of U.S. hospitals and 95 percent of licensed physicians in the United States. 

ii) Blue Select. It provides access to regional PPO networks that may result in more significant savings to employers and employees than the national PPO network.

iii) Blue Distinction Total Care -An HMO-type program that uses care coordination to help reduce healthcare expenses.

iv) Blue Distinction Specialized Care-EPO-type program that provides access to in-network Centers of Excellence.

2. UnitedHealthcare Company

UHC (UnitedHealthcare) is a national health insurance company that operates in all 50 states. United Healthcare, known for its advanced technology, invests approximately $3.5 billion in technology and innovations that benefit members and medical providers. One remarkable example is Virtual Visits, a technology that allows beneficiaries to consult with physicians through their tablets, computers, and mobile devices. UnitedHealthcare offers the following small business health insurance plans:

i) UnitedHealthcare Choice–An EPO-type program that uses UnitedHealthCare’s national network. It has fixed copayments and low out-of-pocket costs for services received from the providers participating in the plan’s national network. However, the program typically does not pay for services received from out-of-network suppliers and other medical providers. Furthermore, primary care doctor selection and referrals are not required.

ii) UnitedHealthcare Choice Plus–A PPO-type program that provides two types of coverage depending on whether the beneficiary uses the coverage network or not. Furthermore, benefits are comparable to those offered by the Choice health plan when members use in-network providers. However, they incur higher out-of-pocket expenses when they use out-of-network providers.

iii) UnitedHealthcare Options PPO. Options refer to the PPO program that provides two levels of services and the freedom to choose any physician without requiring referrals while still receiving coverage for a portion of the medical benefits. Also, members save more money when they use the plan’s provider network.

3. Humana Providers

These healthcare providers offer integrated health coverage to over 16 million members in 22 states, primarily in the west, Midwest, and south regions. Humana (headquartered in Louisville, Kentucky) was ranked first in Fortune’s “Social Responsibility” category. 

Small business health insurance plans offered by Humana include three PPO-type programs. These programs are explicitly designed to meet the unique needs of small businesses and their employees:

  1. High deductible and low monthly premiums
  2. Conventional PPO plan with an annual copayment, deductible, and coinsurance
  3. Copayment plan with zero annual deductibles for members who use the plan’s network providers

Humana’s small business health insurance plans include:

i) Canopy Health Plan:

This plan is designed for small businesses with 2 to 50 employees and includes copays, coinsurance, and deductibles for most covered services. 

ii) Simplicity Health Plan:

This plan may be ideal for small businesses that value low out-of-pocket costs and prefer to know these costs ahead of time. After meeting an annual deductible, employees pay a flat copay for online providers’ services. 

iii) Copay Health Plan- A PPO plan:

This plan might be an excellent option for small companies who want employee coverage for routine medical care and other covered services.

iv) High Deductible Health Plan:  

A good alternative for employees who get annual preventive care services and want full medical coverage in case of a major life event.

Also, Humana programs can be paired with an ASA (Access Spending Account), funded with tax-deductible payments to be used for out-of-pocket expenses.

4. Kaiser Permanente

This company provides health insurance plans in eight U.S. regions and the District of Columbia. Kaiser foundation has received awards and several recognitions from J.D. Power for providing high-quality customer services. Furthermore, the California Medical Care Quality Report Card gave Kaiser Company four out of four stars for its Southern and Northern California regions.

Kaiser Permanente comprises the Kaiser Foundation Health Plan (KFHP), its federally operated subsidiaries, regional Permanente Medical Groups, and Kaiser Foundation Hospitals. Kaiser Permanente provides several small business health insurance plans, including:

  • Standard HMO plans
  • Deductible HMO plans with lower insurance premiums
  • HRA and HSA-eligible plans
  • PPO plans
  • POS plans

Also, Kaiser Permanente provides low-cost managed care options to small businesses and employers.

5. Aetna Company

Aetna was named in Fortune’s list of the World’s Most Admired Companies. It ranked fourth in the “Health Care: Insurance and Managed Care” category. It provides a wide range of group health insurance options for small businesses, including indemnity plans, POS, HMO, and PPO programs, as well as high-deductible plans. Also, Aetna offers the following small business health plans:

i) Open Choice. A PPO plan that provides access to a nationwide network of participating medical centers and service providers. 

ii) Traditional Choice. A traditional indemnity program that does not have a network of participating insurers and does not require physician referrals to professionals for enrollees to receive coverage. 

iii) One-to-One Aetna Health Fund. An HSA or HRA connected with the AETNA group health insurance plan of your choice. 

Step 6: Get a quote online or contact a licensed Insurance Shopping broker for assistance

At Insurance Shopping, both the online quote system and licensed brokers can assist you in comparing small business health insurance companies in your local area. It is easy to obtain a quote with Insurance Shopping because there is no cost for these services. And you are under no obligation to purchase.

Health insurance agents at Insurance Shopping may perform a variety of services, including:

  • Comparisons of premiums, benefits, and insurance companies
  • Collaboration with you and your preferred insurer on health plan implementation and ongoing services to resolve any issues that arise after the plan is in place for your employer and employees.
  • Assistance with educating your staff members on how the plan works
  • Reviewing the financial impact of different health insurance options on your company
  • Assistance with policy renewals or new coverage

To speak with an Insurance Shopping representative, please call +1 855-913-1570. You can also begin comparing personalized group health insurance quotes for your company online at any time.