Health Plan Options for Small Businesses

Friday, May 07, 2021

The complexities of offering different benefits to different employees can be a daunting challenge for small businesses. So how do you find the best plan to meet your small business health care requirements? This article looks at what’s involved, and what you should consider.

Does my small business have to offer health benefits?

Let’s start with the most fundamental question: are you obliged, as a small business owner, to offer your employees health benefits? The short answer is no – you aren’t. However, if your small business employs 50 or more people, it could be open to a no-coverage penalty when you come to file your taxes1. So obliged or not, it’s worth examining the advantages of offering employee health benefits.

Why should my small business have a health benefits plan?

Every business, large or small, wants talented, motivated people on its staff. You work hard to attract them – and if you’re smart, equally hard to retain them. Salary will always be a prime motivator for most employees2. But beyond this, it’s often the benefits package as a whole that encourages good people to join your business (and stay).

So if you’re currently looking for talent, having an ace up your sleeve in the shape of a good employee health benefits plan never hurts. And if you’re keen to ensure those top team performers continue making your small business a success and don’t move to a rival, the health benefits you choose to offer can help tip the balance in your favor.

Consider this, too: it’s not just your employees who benefit from the health plan you put in place. Their loved ones and dependents can also rely on the package – another top of mind factor for those deciding to join or stay with your company.

As if all this weren’t good reason enough, any small business providing a healthcare plan may be eligible for the Small Business Health Care Tax Credit3 if:

You have fewer than 25 full-time equivalent employees on your payroll
Average annual employee salaries don’t exceed $51,600
Your business pays at least 50% of the health plan premium

Other advantages to offering a healthcare business plan

Attraction and retention of talent and the Small Business Health Care Tax Credit are just two advantages to offering different benefits to different employees. But there are others4:

Group health benefits plans typically have lower premiums than individual plans
Health plans promote company loyalty, contribute to job satisfaction and help with staff morale
Employees with good health coverage tend to stay healthier, take fewer absences and focus better at work
A good health benefits plan fosters a positive culture and can lead to wellness initiatives

Some healthcare small business ideas

The most conventional coverage choice in the business world is group health insurance. But for most small businesses, it’s prohibitively expensive. Employers pay 50% or more of the premiums – and employee contributions can run into thousands of dollars5. So while it may be an idea, it’s not one you can realistically consider.

By contrast, self-funded group health benefits are funded by your small business. You set up the plan, collect employee contributions (while also paying in the company’s contribution), and use the money collected to reimburse your employees’ medical claims.

Choose a group health benefits plan from Allstate, and the money you and your employees pay in is divided three ways:

Admin fees

Part of the cost for your small business health plan goes toward our administration of your plan. We make sure your employees have the information and support they need. We also handle all claims for you.

Stop loss

Think of this as a ceiling to what you can expect to pay out. If your employees’ claims exceed what was budgeted in any plan year, stop loss caps your health benefits expenditure. So no nasty surprises for you as a small business owner.

Claims account

This is the portion of your monthly payment used to settle claims for your coverage period.

Find out how much your small business could save by choosing a self-funded group health plan from Allstate Benefits. Get a quote online right now, or call our team today on (930) 203-1232.