Choosing the Right Strategy for Small Business Health Insurance

Posted by Bobby Brown on December 12, 2023 - 7:20pm

The best small business health insurance plans are an affordable benefit that can boost your bottom line

Starting a small business is difficult enough, and choosing the best group health insurance plan isn’t any easier. For most small business owners, the idea of creating an employee health benefit can seem financially out of reach.

But the smart ones know this: Employee health plans are the single most effective way to attract new talent, drive productivity, and increase employee satisfaction.

Q: Do I need to provide health insurance for my small business?

If you’re a business owner with 50 or fewer employees, then you aren’t required to provide a group plan. However, group health plans, in their many forms, can create a valuable incentive package for employees.

In addition to higher job satisfaction and productivity, group health insurance has been linked to increased employee retention.

Q: What are my options for small business health insurance?

Here are the options you have when setting up a small business health plan:

Let employees choose their own coverage
Traditional small group health insurance
Group direct primary care (DTC)
Group healthshare plans

Option One: Let employees get their own coverage
If you have 50 or fewer employees, then you’re not required to provide access to a group plan. This may seem like the most affordable option when it comes to up-front costs, but it lacks the many bottom-line benefits of offering a group plan.
PROS	CONS
Saves money	Employees without a group plan are more likely to change jobs frequently
Employers don’t have to do anything	Unhealthy employees can lead to expensive drops in productivity
	It’s harder to attract new talent without a benefit plan

Option Two: Group health insurance plan for small business
Group health insurance isn’t as expensive as most people think. In addition, merely offering a health benefit can lead to increased employee satisfaction, which can have a big impact on your bottom line.
PROS	CONS
Employee health insurance is a valuable benefit that makes employees happy	Compared to the other options, traditional group health insurance is the most expensive
Group plans can have a big impact on your bottom-line

Option Three: Direct primary care (DPC) for employees
Direct Primary Care (DPC) is exploding in popularity because of its flexibility and affordability. DPC arrangements allow members to visit a primary care physician as often as they would like, in exchange for a monthly payment that is much less than full insurance.
PROS	CONS
DPC arrangements are more affordable than group health insurance	DPC plans don’t usually offer coverage for emergency care or hospital visits
DPC is becoming more and more popular as an insurance alternative

Option Four: Group healthshare plans
Known as Health Care Cost Sharing, healthshare plans are not technically insurance. Instead, they’re a cost-sharing program where all members split the burden of medical costs. While healthshare plans were originally all faith-based, they are now available to everyone, even individuals with pre-existing conditions.
PROS	CONS
Very affordable	Healthshare plans can be less comprehensive than ACA insurance and are generally best for large or unexpected medical expenses
A popular alternative to traditional, “one-size-fits-all” group insurance