Health insurance can be a lot of trouble to manage for small business owners but thankfully, many insurance companies have started catering health insurance to small businesses.
Mentioned below is the rundown of the best health insurance options for small business owners. We have even listed down some information regarding deductions and credits that can help offset the overall costs.
How to purchase health insurance for owners of small businesses
The primary factor while purchasing health insurance for a small business is the size of the business. IF you are a Sole proprietor, you can get coverage from the following sources:
Individual Marketplace – You can choose this option if you are looking at buying an individual plan. Depending on your location, you may even be eligible for premium tax credits. These are purchased thru your state’s individual health insurance marketplace.
Private Individual Plan – There are some health insurance carriers that are selling individual plans directly to individuals. By opting for this, you will lose eligibility for subsidies offered for government health insurance premiums.
Trade association plan – Some associations that are formed on the basis of professional trade allow some of its members to buy health insurance plans as a group. These can be beneficial in some aspects as opposed to individual insurance plans. Association plans tend to benefit those that are not eligible for small business plans as it lets these small companies pool together to help lower costs.
Medicare – The health insurance coverage for seniors is provided by Medicare. In general, one must be age 65 or older to qualify for Medicare, however those with permanent disabilities can also apply.
Businesses with multiple people can get health insurance for small business owners through the following sources:
Small Business Health Insurance Plans – There are a lot of health insurance carriers that are selling group policies directly to businesses of various sizes. Business owners can utilize the free help of a broker to help compare plans from various insurance companies. Available carriers differs from state to state, and even within different counties in each state. An insurance broker is adept at knowing what options your business has, and can compare pros and cons of each for you to help you decide which plans work best for you.
SHOP (Small Business Health Options Program) Marketplace – To qualify for this plan your business must have anywhere from one to fifty employees and must operate within the state in which you are applying for this. This plan must be offered to all the permanent employees and a minimum of 70% of all the employees must enroll. Each state has their own SHOP marketplace, so you would need to check with your state’s department of insurance to find out where to apply.
How much is being spent health insurance by small business owners?
The cost of obtaining healthcare for employees as well as the business owners depends on various factors like location, age and the size of the workforce. According to PeopleKeep, a small business with less than 200 employees reportedly spends close to $6,480/ employee for single coverage and around $17,616/employee for family coverage. In high cost areas such as New York City, these premiums can top $9600/employee and $24,000/family.
Can Health Insurance be deducted as a Small Business Owner?
Yes, one of the big benefits of small group health insurance is that the premiums for health insurance plans can be deductible from the company’s taxable income, and if a Section 125 POP plan is in place any premiums payable by the employee is exempt from taxation. This is the main reason why many entrepreneurs and small business owners are choosing to opt for such plans for their company and their employees.