Category: Individual

Michigan Business Vs. Individual Health Insurance: A Cost Comparison

By The Wellthie Insights Team

In the state of Michigan, an individual health insurance policy is 86% more expensive than the monthly premium for a small group plan.

As an employer, depending on your business’ size, you may be required under the Affordable Care Act (ACA) to offer your employees qualified health insurance options. Employees who don’t receive health insurance coverage through a job will need to purchase an individual health care plan. For families, Individuals, and business owners alike, health insurance premiums can seem like an enormous financial burden.

In 2017, health insurance premiums in the state of Michigan accounted for 36% of an individual’s median household income. Naturally, it is recommended to seek out where you can compare health insurance and save money to find the best policy at the lowest available price.

Wellthie partnered with ValuePenguin, a free source for information and tools to help people make consumer spending decisions, to analyze Michigan health insurance plans and identify small group and individual health policy premium differences.

Major Findings

On average, small group policy premiums are $271 cheaper per month when compared to individual health insurance plans.

If you currently do not receive health coverage sponsored by an employer or a federal health insurance program like Medicaid, individual health insurance is available for purchase through a state marketplace. The individual pays entirely for a marketplace policy, which can usually make the policy more costly than a group plan, for which a person would only pay a portion of the monthly premium’s total. 

In the below table, you can notice these differences in health insurance premiums. Group health insurance plans in the Gold tier were 111% less expensive than individual policies. However, individuals whose incomes fall below the federal poverty level may be eligible for premium subsidies on individual plans. Click here to check if you qualify for these subsidies through Michigan’s health insurance marketplace.

 This study utilizes a 70% employer-to-employee contribution ratio of 70%, an industry average for health insurance, meaning that an employer would be responsible for paying 70% of the monthly premiums, while employees would pay the remaining 30%.

As is illustrated below, employees will find significantly cheaper health insurance costs through small group plans as opposed to individual policies. Employees will pay $605 more for an individual Gold-level plan than their share of a small group health insurance premium. Compared to an employee’s percentage of a small group premium, an individual plan will be, on average, 539% more expensive.

On average, employees will pay $518 less for group health plans than individual plans through the Michigan marketplace in Wayne, Oakland, Macomb, Kent, and Genesee. 

When analyzing policies in Michigan’s most highly populated counties, the gap between the group and individual health insurance costs only widens. Group policies will be 137% less expensive than individual health insurance plans of the same metal tier across Bronze, Silver, and Gold metal levels. In Michigan’s five largest counties, Platinum individual health insurance policies were not offered and therefore were not a part of the analysis. 

In 2019, monthly premiums for small group health insurance reached an average of $315, a 3% increase from the cost in 2018.

From 2018-2019, small businesses witnessed a minor increase in per-employee group health insurance costs. The metal-level group health insurance policies which saw the most significant monthly premium increase, with premiums rising $18 over a single year, were Bronze plans.

Gold health insurance policies saw the least significant YOY change, with only a 0.46% increase since the year 2018. Employers should note the Gold tier health insurance plan is the most common policy offered in Michigan, with an average of 121 Gold policies available in each county.

From 2018-2019, small group plan deductibles raised by 2%. 

Depending on the tier, deductibles can vary greatly. Additionally, deductibles directly affect the amount an employee will have to pay for health insurance. It is beneficial for employers to analyze deductibles and decide what plans will be of the most value to their workers. By providing a high tier plan such as Gold, employees will gain access to coinsurance benefits more quickly and will not have to spend as much money out of pocket. 

The most massive increase in deductibles occurred in Gold health policies, which spiked 12% year over year.

Michigan Complete Rankings of Counties and Their Average Group and Individual Premium Costs

Technique

Wellthie, in conjunction with ValuePenguin, compiled and researched individual and small group health insurance policies from the Michigan state marketplace. Wellthie is a national, online small group benefits marketplace that allows a business owner to connect and interact with hundreds of carriers and a licensed broker network. Here they can find a benefits program that can be tailored to their business needs. Wellthie has in-depth knowledge of the small group health industry and can provide some of the most accurate quotes available.

In this study, all plans and quotes were generated from the 2019 plan year for a single individual and then averaged based on coverage metal tier. An industry standard of a 70% employer contribution was used for all employer-employee contribution calculations. Census Intercensal County Population Data was utilized to determine the most populated counties in Michigan. 

New York Business Vs. Individual Health Insurance: A Cost Comparison

 


By The Wellthie Insights Team

The Affordable Care Act (ACA) requires business owners in most states to offer health insurance to their employees when they have 50 or more Full-Time employees (FTEs). In New York, Vermont, Colorado or California, business owners are bound by law to make employee health benefits available when their company has 100 employees or more. If a company falls under this threshold, they should still consider providing benefits to their employees as soon as it is feasible for their budget. Offering health insurance has been proven to be an effective way to attract and retain talent; Doing so benefits a company’s employees, their families, as well as the business as a whole. 

In New York, an employee would (on average) pay 233% more for an individual health insurance plan than the amount in premiums they would contribute to a small group health insurance plan. Employers are risking losing top talent and the health of their workforce by opting out of offering small group health insurance as a benefit to their employees.

The at-times staggeringly high costs of health insurance premiums can weigh heavily on small business owners and individuals who are purchasing their own coverage. Since the ACA may require an organization to offer health insurance, (depending on the size of the organization in question), business owners are naturally curious to know their cheapest health insurance options. The cheapest health insurance options for both small business owners and individuals can vary greatly based on a variety of factors. It is recommended for business owners and individuals to make a thorough comparison of health insurance options in order to guarantee they are enrolled in the most suitable coverage.

Wellthie and ValuePenguin, a free source for information and tools to help people make consumer spending decisions, dug into the New York health insurance market and compared small group and individual health insurance premium costs.

Major Findings

From 2017 to 2019, small group health insurance prices rose by 15%. In 2019, the average monthly cost of small group and individual health insurance is around the same at $712, with employees insured under a small group plan paying only $213 of the total health insurance premium. Small group premiums in the metropolitan areas of New York (the five largest counties) were 13.12% more costly than individual premiums. Over the past two years, small group insurance premiums have increased by 15%.

Small business owners’ group health insurance premiums have increased at a steady rate since early 2017. The average monthly premium for qualified health insurance soared by 8.92% between 2017 and 2018. And between 2018 and 2019, the average premiums for a small group health plan across all coverage metal tiers rose by $5.60%. While this is a more modest rise, small-business owners should know about these cost increases, which will undoubtedly affect a business’s bottom line.

Out of all of the metal tiers, Gold metal plans saw one of the most notable rises in average premium costs, with a 16.49% increase over a two-year period. Small business owners should take note, as Gold policies are the most common metal tier plans sold on the small group marketplace, with 172 health plans offered in 2019.

On average, individuals who do not receive health insurance through an employer spend $499 more for coverage.

For people who currently do not receive coverage through an employer or federal programs like Medicaid or Medicare, individual health insurance is available for consideration. With individual plans as opposed to group plans, the individual pays the entirety of the premiums. As a result, individual plans tend to be much more expensive for an individual as opposed to what they would be expected to contribute to their premiums if insured under an employer policy.

For this study, we decided to use an employer-to-employee contribution ratio of 70%. 70% is an industry average where an employer would be responsible for paying 70% of the monthly health insurance premiums, while employees would pay the remaining 30%.

In NY’s five largest counties, employees pay 195% more for an individual policy.

In some of New York State’s most populated areas, the differences between small group and individual health insurance premiums have even wider gaps. When compared to a marketplace policy, the monthly health insurance premiums for small group plans were, on average, 13.12% more expensive. We analyzed the Bronx, Kings, New York, Queens, and Suffolk, which are the five largest counties by population.

In aggregate, the small group policies are more expensive in these highly populated areas of the state, but there is a more narrow difference in premiums for the employee. Compared to their monthly premium contribution for small group health insurance, a person would pay, on average, 195% or $532 more for an individual policy.

Competitive employee benefits programs can attract competitive talent.

Depending on an organization’s employee population, small-business owners may be required by the ACA to offer their employees health insurance options. The ACA does not currently have the individual mandate in 2019, but the employer mandate is still in place, and something for employers to keep in mind. According to the ruling, employers with 50 or more FTEs are required to offer minimum essential coverage or face a penalty. However, if a company has fewer than this number of employees, an employer is not required to offer their employees health insurance coverage. But despite the ACA’s mandate, there is a multitude of reasons it can be beneficial to provide employee coverage.

Choosing to offer health insurance to employees can positively impact your employees and business overall. In the Harvard Business Review’s survey of the “Most Desirable Employee Benefits,” over 88% of respondents mentioned better health, vision and dental insurance as a primary factor when deciding whether or not to accept a job. If employers decide not to offer insurance, they may lose out on potentially strong candidates for positions at their company. This loss could negatively affect profits and bottom line, as companies won’t be hiring the best workers for the job.

New York Complete Rankings of Counties and Their Average Group and Individual Premium Costs

Technique

Wellthie, along with ValuePenguin, compiled health insurance plans and quotes from the New York small group and individual health insurance marketplace. ValuePenguin possesses a wealth of valuable data, which, coupled with Wellthie’s in-depth knowledge of the small business health insurance industry, enabled ValuePenguin and Wellthie to collaborate to produce a thorough analysis of small group and individual health insurance premiums in New York State. The quotes and plans used in this study were pulled for the 2019 plan year for a single individual and then were averaged depending on the coverage metal tier. For all of the employer-employee contribution calculations, there was an industry standard of a 70% contribution from the employer used. Census Intercensal County Population Data was used in calculating the largest counties in New York to determine which were the most populated.

The Importance of Employee Benefits to Stay Competitive

By Julie Scott, PayTech

Did you know that many American workers feel that employee benefits are more important than a higher salary? In a 2018 study, potential candidates cared about healthcare, vacation time and 401k opportunities alongside their compensation when evaluating employers. Company perks such as gym memberships, flexible schedules, and free snacks are also important to modern employees. Companies who understand the importance of employee benefits and perks are not only able to recruit top candidates, but they are also profiting from the improved performance from their current employees. 

What is the purpose of employee benefits?

The purpose of employee benefits is really to improve an employee’s life outside of work. But, what companies are beginning to understand is that an employee’s happiness outside the office has a direct correlation to their performance at work. By removing some stress and offering solutions to employees’ pain points, companies benefit from more committed and focused employees. This also helps foster a long-term relationship with employees who feel that their company is taking care of them, and in return, employees put in their best effort to take care of their company.

Why are employee benefits important?

Employee benefits are an important part of any compensation package. Benefits help an employee feel taken care of in multiple aspects of their lives by helping them manage the cost of healthcare, plan for their financial future, and enjoy an overall higher quality of life. When your employees feel secure and taken care of, they perform better and stay at a company longer. This creates a more positive work environment, helping companies better achieve their goals. In short, the importance of employee benefits is that they keep your employees happy and make your company more successful.

A good benefits package can help recruit and retain talented employees.

When people are looking for a new role, they consider a lot of factors including the job description, the company culture, the pay, and of course, the employee benefits. Companies can be competitive in many ways, but oftentimes it comes down to one or two key differences that end up making the decision for top talent. Many companies have similar jobs with competitive pay, so the opportunity to differentiate your position lies in your company culture and your employee benefits. 

A good benefits package can also help you retain your current employees. Even if your competitors try to offer one of your team members a higher salary, it would be hard for them to compete with ample vacation time and a comprehensive healthcare plan. Ensuring your employees’ happiness is one of the best things you can do to help keep your team motivated and loyal.

Benefits can help employees focus more on work while they are at work.

The reality is each one of us has a life outside of the office. While we do our best to minimize distractions, sometimes we can’t help letting our minds drift to concerns with our family’s well-being, financial obligations, or mental stress. However, if you can relieve some of this outside pressure for your employees, you’ll benefit from a more focused workforce.

One example might be offering paid parental leave. If one of your employees has a new baby, they’ll be experiencing major life changes at home. Relieving the financial pressure of taking time off work allows your employees to adjust to their new life and come back to work more focused and less stressed.

Wellness programs can help improve performance.

One of the biggest costs companies have to deal with is employee illness. When an employee gets sick, they don’t just miss work. They often perform worse leading up to their time off and take a while to get back in the swing of things when they come back. Even worse, they can get other employees sick which ends up taking a big toll on your company overall. 

You can mitigate employee illness by instituting a wellness program. This allows your employees to manage their health without having to put in money or extra hours outside of the office. This has the additional benefit of reducing healthcare costs for your company. 

Examples of a company wellness program include free gym memberships, healthy snacks in the kitchen, and regular company outings. These wellness initiatives don’t have to cost you a ton of money but can have a huge impact on your bottom line by reducing employee illness.

A good benefits package can improve company culture.

Your company culture is the lifeblood of your business. You can keep it strong and healthy by listening to your employees’ needs and going above and beyond to ensure they are met. This will help your employees feel more optimistic about your organization. When potential employees or even clients come into your office, they will experience a happy, positive environment that they’re excited to be a part of. Your employees may even share their positive perception of your company outside the office, resulting in a terrific public image that will further help you attract top talent and clients. 

A good benefits package can help you meet your employees’ needs both inside and outside of work. This is one of the best investments you can make towards keeping your company culture strong.

Statistics show that benefits, perks are often more important to employees than a higher salary.

You might have been surprised to read that benefits and perks are more important to employees than their salary. But, according to statistics from the business mentoring network, SCORE, employee benefits are an incredibly powerful selling point for potential candidates. 

According to the survey, 88% of respondents cared more about flexible hours than salary. 80% valued vacation time and work-from-home options. 48% wanted student loan assistance and 42% wanted paid parental leave. Company perks like free gym memberships, free snacks, and weekly outings were also valued by more than 20% of employees.

The survey also reported how benefits contributed to overall satisfaction at work. 53% of employees said that more perks at work increased their quality of life. 49% said they made them feel more valued as a team member and 44% said it directly improved their physical and mental health. The numbers don’t lie. Strong employee benefits and company perks are a necessity in today’s work environment.

Which employee benefits and perks do employees consider when choosing a company to work for?

Now you know the importance of employee benefits, but how do you decide which to invest in? 

The following 10 benefits have ranked the highest from employees varying in ages and backgrounds. Not surprisingly, healthcare ranked number one, followed closely by paid vacation time. Performance bonuses were also high on the list in third place. Paid sick days and 401k options finished off the top five. The next 5 benefits were less traditional including flexible schedules, office perks such as free lunch and casual attire, employee development programs, tuition reimbursement, and employee discounts. 

Ultimately, when it comes to selecting the employee benefits and perks your company can offer, you should analyze what your team values the most and what would help improve their overall quality of life. Taking a survey from your existing employees is a great way to get immediate feedback on where to invest your time and money.

The 3 Biggest Challenges for Small Businesses to Overcome When Purchasing Medical Insurance

By Sally Poblete

The decision to purchase medical insurance for your small business employees is a serious decision that impacts both your company and your employees’ lives. Despite the complexities presented with making these types of purchases, health insurance remains a crucial need for families across the country. Here are the three biggest challenges for small businesses to overcome when purchasing medical insurance for their employees:

Payroll

Most carriers require small businesses to have a payroll system in place to provide small group medical insurance to their employees. Payroll is a necessity for every small business owner that wants to purchase group insurance, and finding the right system or service to take care of payroll can sometimes delay their purchasing of small business medical insurance. Payroll providers can be essential in the healthcare purchasing journey for small business owners. If you do not have a payroll system in place, but you want to offer insurance to your employees, payroll is the first step in your journey. 

Budget

A limited budget can be an enormous barrier between a small business owner choosing to offer medical insurance and referring employees to healthcare.gov for individual coverage. For small businesses, health insurance rates are determined based on the age of your employees, the business’ location, the carrier, and the type of plan offered. The rates will not vary based on the health of your employees if you have under 50 full-time equivalent employees (based on the ACA regulations). 

We selected a few specific zip codes in common metropolitan areas and compared small business health insurance prices using Wellthie’s online small business health insurance marketplace: 

     – For the ZIP code 85001 (Phoenix, AZ), there are plans starting as low as $245.64* a month for the third quarter of 2019.

     – For the ZIP code 30302 (Atlanta, GA), there are plans starting as low as $273.82* a month for the third quarter of 2019.

     – For the ZIP code 11106 (New York City, NY), there are plans starting as low as $477.70* a month for the third quarter of 2019.

*employee only cost for a 35-year-old

Metallic designations (Bronze, Silver, Gold, and Platinum) are something to consider as well when it comes to budgeting for small business medical health insurance plans. Platinum plans will cost significantly more in premiums for your employees but far lower costs at the doctor’s office. Bronze plans will tend to cost your employees less money on their premiums and more money when they need to use medical services.

Here are the Small Group medical insurance premium averages in New York state across all four metal levels (Bronze, Silver, Gold, Platinum) for early 2019:

    – Bronze: $544.37  

   – Silver: $673.35  

   – Gold: $789.19  

   – Platinum: $941.86

As a small business owner and health insurance decision maker, you are the only person who can determine what is affordable for your small business. Your best option is the plan you can afford that provides sufficient coverage for your employee population. 

Knowing Where to Start

For many small business owners, simply knowing where to start can be one of the biggest obstacles in moving through the medical insurance shopping and enrollment process for their employees. In this digital age, more and more industries are being disrupted by technological advancements, and small business medical insurance is no exception. Online small business health insurance marketplaces are making it far easier to for small business owners to navigate the medical health insurance shopping process than ever before.

Wellthie’s online small business health insurance marketplace is a tremendously useful tool for small business owners to shop and compare medical health plans and generate an unlimited number of quotes in just minutes. Even if you’ve never offered insurance before, you can begin your search by typing in your small business’ ZIP code and immediately see the number of plans available for your employees in your area as well as the lowest average monthly cost per employee (who is 35 years of age). Enter in your company name, industry, email address, and phone number, along with the number of employees in your company, and you’ll be able to see what carriers, products, and premiums are available, in an instant. You can run quotes side-by-side to compare and make the most educated choice on the plan or plans which best suit your team members. At any point in the process, you can be connected through the platform to a licensed health insurance broker through email, phone, or chat to answer any of your questions and to enroll you in the plan/s of your choice.

4 Different Generational Approaches to Employee Small Business Health Insurance

 

By Sally Poblete

Generations differ when it comes to clothing, politics, music, technology – you name it. It stands to reason that these differences can also extend to differences in approach, such as making important purchases like financial products, housing, and health insurance.

The United States was built on small businesses, and it is no surprise that owners range in ages from Generation Z, Millennials, Generation X, to Baby boomers. Each generation possesses a unique set of needs and desires from their health insurance. From the shopping experience to benefit provisions and premiums, we have broken out how each generation tends to view and approach the purchasing of small group health insurance.

Baby boomers (Boomers)

Baby boomers, or Boomers, are commonly defined as individuals born between 1946 and 1964, or people in the age range of 55 – 73. In 2011, the first people to be considered Boomers reached 65 years of age, also known as the standard age of retirement. Boomers were born into a far more analog world than the one we live in now. Notably, the majority of small businesses are owned by Boomers, with 73% reporting they want to grow their current businesses.

When it comes to employee health insurance, the small group premiums of Boomers are significantly higher than other generations, because with the Affordable Care Act (ACA) the only factors that can affect pricing are age and location. In addition, Boomers tend to prefer working face to face with a licensed broker and tend not to be as tech-savvy as later generations. They have also started qualifying for Medicare and are exploring those options in lieu of their group medical plans.

Generation X (Gen X)

Generation X, or Gen X, refers to individuals born between the early 1960s to the early 1980s or people in the age range of 35 – 54. Roughly 40% of small business owners are GenXers and they are at their prime working years. When purchasing employee health insurance, Gen Xers may be most familiar with working with a licensed broker in a face-to-face setting but are also open to optimizing their shopping experience through digital means. They are also at the age where their families are growing and therefore have needs beyond their own. They may be attracted to plans with lower deductibles and copays such as a PPO plan. Gex X is the generation most likely to be caregivers—perhaps taking care of both their adult children and their aging parents—so they’re likely looking for benefits information that applies to themselves as well as to their multi-generational family members.

Generation Y (Millennials / Gen Y)

Generation Y, or Millenials, refers to individuals born from the mid-1980s to the mid-1990s or people in the age range of 24 – 34. Millennials have grown accustomed to using modern technology over the course of their adult lives; they were growing up at the same time the technology was advancing. Transparency is crucial for millennials; They want to know that they have viewed all the options and fully understand all the parts of the decision. This includes access to in-depth cost comparisons to ensure they are purchasing exactly what they need. They love the simplicity of technology and prefer to complete their transactions digitally. They are comfortable with High Deductible Health Plans as they tend to be young and healthy and don’t necessarily need all the benefits of a more traditional plan. In particular, Millennials benefit from Health Savings Accounts to save for the future and they also appreciate wellness incentives.

Generation Z (Gen Z / Zoomers)

Generation Z, or Zoomers, refers to individuals born from the late-1990s to the early 2000s or people between the age range of 13 – 23. As the youngest generation, they are the most accustomed to technological processes and approaches, as they truly have not experienced life without them. Zoomers are diverse and on track to be the most well-educated generation yet – making them the most likely generation to accept the continually improving technological advancements meant to make their shopping experiences more efficient. Research suggests that Zoomers are positioned to become a more entrepreneurial generation than millennials; They not only prefer digital transactions but have come to expect them no matter the purchase. 70% of Zoomers consider quality health insurance as a top priority in a job. This generation may still be eligible to remain on their parent’s plans if they are under the age of 26. They also love transparency but are not tied to traditional views on health plans or options.

No matter what your generational preferences are, health insurance will likely remain a need for you and your family. The one size fits all approach is not conducive to the multiple generations that are purchasing small business health insurance for themselves and their families. Thankfully, there are methods of approaching the purchasing of employee small business health insurance to appeal to any generation, regardless of their level of comfort with the technologies that be. However, surveys indicate that customers are moving online to make their purchasing decisions, and will continue to do so over time at an increased rate.

3 Top Insurance Considerations for Small Businesses

By Callie McGill, ValuePenguin, Inc.

Watching your company grow can be exciting, but it can also come with increased liabilities. As you hire more workers and expand your operations, different risks begin to evolve. Many small-business owners don’t realize there are ways to mitigate certain risks associated with owning and growing a business.

Three insurance products—health insurance, a business owner’s policy and auto insurance—can help any entrepreneur manage risks associated with their small-business growth.

Health Insurance

Any small business that brings in new talent should prioritize protecting that talent, and health insurance is one way to do so. According to research from the University of California, Los Angeles, employees are more productive when they’re healthy and can greatly benefit from wellness programs.

For small businesses, health insurance is not a mandatory purchase. If your business can be defined as a “small employer” (fewer than 50 full-time or full-time-equivalent employees), you’re not subject to the Affordable Care Act’s employer mandate. However, your legal definition changes to an “applicable large employer” (ALE) once you have 50 or more full-time employees, so you’ll want to keep an eye on your employment numbers.

That said, there are still notable benefits to offering health insurance, even if it’s not a legal requirement for your business. A 2018 survey from America’s Health Insurance Plans (AHIP) found that a majority of workers (56%) considered health care coverage a “key factor” in their choice to stay at their current job. Without employer-sponsored coverage, employees can buy individual and family health insurance plans through the online state insurance exchange—but it’s a costly option. In Florida, for example, the average monthly cost of health insurance is $598 for a single adult with midtier coverage. Alternatively, a single Florida employee enrolled in an employer-based health insurance plan contributes an average of $120 to the plan every month.

And while it’s easy to think employees don’t realize or appreciate the cost of health insurance, most actually do. The same AHIP survey found that 77% of employees felt more favorable toward their employers when there was more information transparency regarding the costs to provide insurance.

Price is the biggest factor that causes many small-business owners to shy away from health insurance. However, small-business owners can get help paying for the costs of healthcare.  

The Small Business Health Options Program (SHOP) is a tool small business owners can use to find affordable health insurance for themselves and their employees. Set up as part of the ACA, this insurance exchange allows small businesses to shop for health and dental plans. What’s more, employers can receive a tax credit of up to 50% of their contributions on employee health care premiums, or a credit of up to 35% for tax-exempt businesses.

Small business owners can find additional options, albeit without the tax incentives, to meet the needs of their employees through online small business resources such as Wellthie.

As small-business owners enjoy reduced costs, employee retention and higher productivity, offering health insurance should be a top priority for any entrepreneur.

Business Owner’s Policy

Most businesses have two large concerns from the outset: protecting the businesses against liability lawsuits and protecting business property from damage or loss. Quite often, businesses purchase general liability coverage for the former and commercial property insurance for the latter. However, these two concerns can be combined into a business owner’s policy, which can help reduce a lot of headaches and paperwork.

Individually, general liability and property insurance are among the most important coverages for a business. General liability insurance protects your business if it’s at fault for incidents such as bodily injury, property damage, false advertising or libel claims. The policy covers the business owner and any employee who’s found liable while representing the business.

Commercial property insurance is designed to protect your business property against common losses such as fires, theft, vandalism or other events that may result in a loss of your ability to use your physical resources. Many property insurance policies even provide for business continuity, so your business won’t need to shut down due to loss of income.

With both concerns on the table, it makes sense to combine them into one package. In many cases, insurers offer a discount to small businesses that purchase a BOP instead of general liability and property insurance separately.

Auto Insurance

It’s easy to overlook the need for business-specific auto insurance coverage because you and your employees probably already have your own personal auto coverage. Unfortunately, personal auto insurance doesn’t cover you or your employees while you use company vehicles or while you use personal vehicles for business-related activities.

That’s where commercial auto insurance policies and hired and non-owned auto insurance policies come into play. Commercial auto insurance is designed to offer standard coverage for vehicles owned and registered to your business, such as food trucks or vans used for landscaping services. The policy will cover you and your employees, which mitigates liability concerns for your whole business.

Hired and non-owned auto coverage is a special form of insurance that covers vehicles you or your employees personally own but often use for business. It offers liability coverage for any activities related to work, such as driving to an office supplies store or delivering food to customers. One survey found that 54% of small-business owners use their vehicles to conduct business, making this type of coverage considerably important given the limitation of personal auto insurance coverage.

Small-business insurance needs can vary dramatically by industry. However, small-business owners should evaluate their primary insurance needs to help avoid common risks and liabilities. It is important to collect multiple quotes and compare prices to ensure you are securing the best and most affordable coverage.

Your Small-Group Clients Should Use Marketplaces

 

Sally Poblete says online health benefits exchange programs have proven their worth.

By Sally Poblete

In this digital age, consumers are not only accustomed to shopping online but oftentimes prefer it to other means of shopping.

In fact, according to a Marketing Dive analysis of Criteo data, 75% of young consumers prefer to do most shopping online when they can out of convenience. This is no different when it comes to health insurance.

The services provided by health insurance marketplaces bridge the gap between the online shopping experience that small business owners have come to crave and the expertise needed from licensed agents.

Marketplaces also shift some of the shopping experience directly to the small business owner, which saves time and money for the agency. This has a direct impact on the margins and makes this business segment more profitable for agencies. Less time spent face to face with clients or communicating back and forth with small business owners means brokers and agents have more time to sell to more clients.

Here are 3 reasons why brokers and agents should encourage small business owners to shop for health insurance via a marketplace:

1. Modern Shopping Experience

Gallup research has shown that millennials are twice as likely to buy insurance online. Through the technology provided by online health insurance marketplaces, agents and brokers can deliver a modern digital experience to their younger small business clients, who favor a digital experience; This means providing their clients with the freedom to browse and compare their own options on their own schedule.

2. Improving Margins and Profitability

Without the use of online marketplaces, getting small-group clients enrolled in health insurance can be a seemingly never-ending stream of tedious emails, phone calls, and spreadsheets. Enabling small business owners to shop and compare their options in an instant, online, simplifies the process and results in quicker, more informed enrollments. This time savings means that you will spend fewer hours closing deals and will have a direct impact on your agency’s bottom line.

3. Increasing Agency Revenues

Agents and brokers who use online health insurance marketplaces for their small-group clients can sell multiple lines of coverage on a national level thanks to user-friendly technology. Upselling is necessary to improve margins and an online experience allows a small business owner to browse without pressure. It may also help an agent see a small business product interest that they may not have been aware of. They can drastically increase their sales while growing their book of business, which at the end of the day is a goal for any agency or broker.

In the ever-changing insurance industry, brokers and agents are beginning to embrace the trends and tools that can ultimately make their jobs easier while also appealing to an emerging new customer base that desires a more digital experience. This need is even more necessary in the small group space as margins continue to get tighter and demands continue to increase. Utilizing a small group marketplace greatly benefits both the small business owner and the agency.

 

PEOs vs. fully-insured plans: What’s the best bet for small businesses?

By Sally Poblete

Health insurance benefits are important to employers of all sizes — but they are often most difficult for small businesses. Administrative challenges, small staff, and budgetary concerns all come into play.

But providing employees coverage is essential. So how can small businesses make the right choice when it comes to which health plans to offer? Being well-informed will greatly simplify the process of choosing which health plans ultimately make the most sense for you and your company. With that said, if you’re not entirely sure whether you should use a professional employer organization or consider fully-insured medical plans, it might be helpful to know the pros and cons of each.

Here’s what small employers should know about both plans.

PEOs

The basics: PEOs offer services ranging from payroll processing, benefits administration, HR training, and support and workplace insurance coverage to both small and medium-sized businesses.

The pros of PEOs: PEOs include employees with all of the PEO’s co-employees to create one larger group/pool of employees. This enables the PEO to provide the employees with access to employee benefits similar to ones they would receive as part of a larger corporation, despite the fact they work for a small business.

PEOs offer more services to small business employees than just health benefits. PEOs make available compliance support, payroll, human resources services, and workers compensation.

PEOs lower the administrative burdens of small businesses which allows them to focus on their core business strategies in lieu of worrying about the minutiae of benefits.

 

The cons of PEOs: PEOs offer a very limited choice in carriers, meaning that your employees won’t necessarily be presented with the best options for them or their families.

PEOs require administrative fees to support their services and are charged per month per employee or percentage of total payroll.

PEOs force small businesses to rely on an external team (rather than internal employees) to handle important and sensitive HR processes.

Fully-insured plans

The basics: Fully-insured plans are employer-sponsored health plans where the premium rates are fixed for at least a year (could have longer contracts) and are based on the number of employees enrolled in the plan each month and their ages. The company pays the insurance carrier a premium.

The pros of fully-insured plans: With fully-insured plans, the prices are based on ages and/or zip code which allows employers to budget. The rates don’t vary with the health of employees, and you cannot be denied based on the health of your employees (no medical underwriting required.) The insurance provider manages all claims, and the risk is assumed by the insurance company.

With fully-insured plans, you can traditionally choose your own package and decide on carriers, as opposed to being required to stick to a very limited set offered by a PEO. You can purchase a fully-insured plan if you have at least two employees. Some PEOs require you to have a higher minimum number of employees (five employees).

With fully-insured plans, there are no administrative fees paid to a PEO. You can choose your own payroll company and have internal HR resources.

The cons of fully-insured plans: With fully-insured plans, premium costs can be higher depending on your geography and age of employees, regardless of the overall health of your employees. (Sometimes claims experience varies depending on the size of the company.)

With fully-insured plans, you don’t have the “one-stop shop” of payroll, HR, and compliance that is available with most PEOs.

With fully-insured plans, the administrative burdens associated with running a small business fall solely on the business.

The health insurance options available for small business employers are vast, and there are pros and cons to each choice available to you and your employees. Prior to making a decision, it’s best practice to be as familiar with all of the details as possible. In the case of PEOs vs. fully-insured plans, neither is necessarily better than the other. The best approach to acquiring small business health insurance is entirely dependent on the specifics of your company and your individual employees. If you do your research and don’t rush into making a final decision, you’ll secure coverage for your team that suits all parties concerned.

3 Reasons Online Marketplaces Help Small Businesses

Below are three reasons online marketplaces help small business owners choose health insurance.

By Sally Poblete

Providing employees with insurance coverage is one of the best ways for small business owners to support their employees. Employees with health insurance are happier, far more productive in the office, and are more likely to stay at a company if they are satisfied with their current benefits. In this digital age, online benefits marketplaces render finding employee insurance for employees as modern and straightforward as searching for and buying other high ticket items such as automobiles or homes. There are resources at employers’ disposal should they have any questions throughout the insurance shopping and purchasing process. Below are three reasons online marketplaces help small business owners choose health insurance:

Convenience
Small business owners are exceedingly busy and their time is valuable. In a recent Vistaprint survey, small business owners reported spending their time on administrative duties, project management, marketing, product development, design and other countless tasks that are essential to growing their businesses. The availability to browse and shop from a laptop or tablet is a convenience that their hectic schedule requires. Compare employee health plan options digitally to save time that would otherwise be spent filling out lengthy paperwork, scheduling meetings or playing phone tag. Sophisticated technology modernizes employee benefits shopping it by removing any confusion or unknowns from the process.

Breadth of options
Most small business owners want to know they have considered a wide range of employee health insurance options before making a purchasing decision. They don’t want to sift through stacks of paper when considering choices but do want to make sure they haven’t missed the best plan or plans for employees. Research shows that 43 percent of individuals shop online and purchase online. Look around the store the next time you are shopping and notice the amount of people searching the price of a commodity prior to buying it. Employee benefits are no different. It is important to utilize the online resources available when providing employees with benefits that suit both their needs and the employers’ budget.

Broker support
The digital experiences offered by online insurance shopping marketplaces does not indicate the death of the broker. People still benefit from having access to an expert in the field should they need any assistance. Even with the most streamlined of digital insurance shopping experiences, employers may have questions and concerns along the way, especially because this is a high-cost decision that impacts employees directly. It is helpful that employers have a licensed broker to answer questions, put them at ease, and act as an ally who can assist through the process. An online experience does not preclude them from having access to one of these valued resources. Licensed brokers are traditionally still made available to small business owners even online.

Employees and their health are important to employers. Taking advantage of the ample resources provided by online health insurance marketplaces is the smartest and most cost-effective way to make sure the team is covered. You will save time overall and be presented with a variety of precise information faster, while still having access to support every step of the way.

Previously published on benefitspro.com

Debunking 4 Commonly Believed Myths About Healthcare for Small Businesses

By Sally Poblete

Making healthcare available to your small business employees can be a daunting prospect. Procuring employee benefits can be costly and confusing to a non-expert in the field. However, it is essential to separate fact from fiction when considering providing your small business employees with the valuable gift of healthcare. Please see below four debunked commonly believed myths about healthcare for small businesses:

My employees have medical issues; I probably can’t even afford to offer health insurance.

For small group health plans, prices vary based on employee age, location, and carrier. The health of your employees is not a determining factor. Small Business fully insured plans are “guaranteed issue,” which means that qualified employees, regardless of health status, can get coverage.

While employee benefits can be pricey, employers do not have to subsidize the entire amount. Depending on the budget, the business owner can determine how much they are willing to contribute. However, most employers contribute anywhere from 50%-100% of the employee only cost. Additionally, there is a wealth of health plan options available for a wide range of budgets.

Employee benefits are too hard to understand.

A study recently found that 4% of Americans couldn’t correctly define the four key health insurance terms necessary for a basic knowledge of healthcare (deductible, copay, coinsurance, out-of-pocket-maximum). Even if you’ve never offered employee benefits before, unfamiliarity with healthcare related language shouldn’t stand in your way from making sure your company is covered. Resources are available to help demystify insurance for small business owners. Licensed brokers are available in a variety of formats to answer any questions you may have. There is also a multitude of explanatory collateral easily accessible online for free breaking down health insurance terminology and preparing small business owners to purchase health insurance plans for their employees.

I can’t get insurance. I missed the Open Enrollment Period.

Small business owners can make employee benefits available to their employees all year round. For the majority of states, the Open Enrollment Period for 2019 was from November 1st, 2018 to December 15th, 2018, with some states (like the District of Columbia or New York) extending their deadlines to the end of January. However, the Open Enrollment Periods only apply to Individual Plans and Medicare, meaning that it is always a good time to offer health insurance to your employees as you are not bound by the Open Enrollment periods. Most insurance companies offer effective dates on the first or the fifteenth of every month of the year for new benefits.

I shouldn’t have to provide insurance to my employees if it isn’t legally required.

Under the Affordable Care Act (ACA), employers who have less than 50 employees are not legally required to offer health insurance. Employees with 50 or more full-time employees may face a penalty for not providing coverage. However, even if your small business isn’t bound by law to offer employee health insurance, doing so benefits your employees, their families, as well as your business as a whole. Employees are far more likely to choose and stay with a company if they are satisfied with the health benefits. In a recent AHIP study, 56% of American adults whose employers sponsored their health benefits reported that whether or not they liked their job’s health coverage was a key factor in deciding to stay at their current position, while 46% said health insurance was either the deciding factor or a positive influence in choosing their current position. Furthermore, employees who are insured are consequently more productive while at work.

No small business is too small to offer benefits. Under federal law, a small business must have at least one full-time equivalent employee other than the owner, spouse, or family member to qualify as a small business and obtain health insurance. As long as your company qualifies as a small business under the ACA, you can provide your employees with healthcare.

There’s often confusion surrounding small business health insurance that may prevent a small business owner from taking the crucial steps to make sure their team is covered. Shopping for and purchasing employee benefits has modernized and become easier over time thanks in great part to continuously improving technology. With all of this information and technology at your fingertips, you can feel confident in taking the next steps to provide health insurance to your employees.

Originally published at blog.ideacafe.com.