If you want to boost productivity in your business and improve employee retention, you need to offer good benefits. Paying a good salary is an important way to attract and retain the best talent but most people will look to the benefits first. When people feel as though they are looked after by their employer and rewarded for their hard work, they tend to be a lot more productive as well, so companies that don’t offer good benefits will fall behind.
Of all of the benefits that you could offer, health insurance is the most important. There are so many good reasons to offer health insurance but the main thing to consider is the health of your employees. A good health insurance package will reduce employee absence and make sure that people are happy, healthy and productive while they are at work. There are also some great tax incentives to offering health insurance benefits, so even though you might think that it’s going to be expensive, you may end up saving money overall.
The only problem is, health insurance can be complicated and if you have never set up a health insurance plan for your employees before, you may struggle with the process. But don’t worry, as long as you follow these simple steps, you will be able to create the perfect health insurance plan for your employees.
Learn About Health Insurance
You probably have a reasonable understanding of your own personal health insurance, but business health insurance is a lot different. There are a lot of different terms that you won’t understand and rules and regulations that you need to get your head around.
Trying to choose a health insurance plan for your employees is very tough if you don’t really understand what you are reading when comparing different options, so spend some time educating yourself. If you search online, you should be able to find definitions for any terms that you don’t understand. You should also check out this page, which outlines all of the basic information that you need to know about how to apply for business health insurance and what your different options are.
The main thing that you need to learn about health insurance is the different plan types available. When you are looking at your options, you will come across the acronyms HMO, PPO and EPO. These are the 3 different types of plans available to you.
HMO stands for Health Maintenance Organizations and the cover that you get with these plans can be quite restrictive. They will only cover treatments from providers that contract with the HMO so any medical facility outside of their network will be unavailable to your employees unless they are willing to pay out of their own pocket. This isn’t always an issue if there are plenty of in-network medical facilities close to all of your employees. However, some people may miss out if they do not have easy access to medical care that is covered by their insurance plan.
A PPO or preferred provider organization is very similar to an HMO but they are usually less restrictive. There are still certain facilities that your employees will need to go to if they want their treatments fully covered by insurance. However, if they do need to visit an out of network healthcare provider, a PPO will usually cover a portion of the cost, leaving the rest to be covered by you or your employee.
An EPO is an exclusive provider plan and they are also very similar to an HMO in that they only cover care from specific medical practices that are in-network. However, an EPO is almost always cheaper than an HMO, which is a big bonus for any small business that is setting up a health insurance plan for its employees.
Understand Your Employee’s Needs
Before you can start comparing different health insurance plans, you need to understand what your employee’s needs are. Things like prescription cover don’t come as standard but if a lot of your employees have regular prescriptions, this will be important to them. You also need to consider how often they are likely to see their doctor. Do they only visit the doctor when something is wrong or do they like to have an annual health checkup?
This can be tricky because you can’t just ask them lots of personal questions about their health. However, you do know important information, like the age range of your employees and some information about their family size. This will give you an indication of how often they are likely to see a doctor, whether they are likely to have a regular prescription and whether they need cover for their family as well. You will need to take all of these things into account when choosing an insurance plan.
Don’t Forget Vision Insurance
Vision insurance is an important part of health insurance that is often overlooked, but it’s so beneficial. Glasses can be incredibly expensive but there are a lot of great online retailers with excellent customer service that are in-network, so your employees can get glasses without having to spend the earth.
Vision problems are incredibly common, especially in older employees and it’s very unlikely that there isn’t a single person in your office that needs glasses. Regular eye tests are important too, but a lot of people don’t have them as often as they should because they don’t have vision insurance and they don’t want to pay out of pocket for it. So, if you are trying to build a comprehensive insurance plan for your employees, don’t neglect vision insurance.
Involve Your Employees In The Decision
Your choice of health insurance plan has a huge impact on your employees, so it’s only natural that they should be involved in the decision. Unfortunately, a lot of business owners don’t consult their team when they are deciding on a health insurance plan.
If you are looking for a new plan or renewing an existing one, let your employees know and ask them if they have an opinion. They will be able to tell you what kind of plan they think would work best and give you a list of their priorities in a health insurance plan.
Everybody will, of course, have different opinions about it but you should still be able to identify key things that are important to the majority of your employees. Not only does this ensure that everybody is happy with the plan that you choose but it also helps you to narrow down your options and make your job of picking a plan a lot easier.
Buy Through An Agent
When you are buying a health insurance plan, there are a few ways that you can do it. You can go directly to the insurance company or you can go through an agent. You might think that going directly to the insurance company is best because you don’t have to pay a commission to the agent. But even though you will save money, you will need to know exactly what it is that you are looking for and most people don’t. You may have an idea of what is important to you and your employees, but you will still need a lot of guidance if you are going to choose the best possible plan, which is why it’s often best to buy through an agent instead.
They will have access to a range of different insurance providers and they can take you through the whole process and help you understand each different policy. You stand a much better chance of finding the perfect policy if you go through an agent, so paying the commission is definitely worth it. Some insurance providers will only allow you to buy through an agent so trying to go direct can sometimes limit your choices.
Understand The Small Business Healthcare Tax Credit
Small businesses often worry about the cost of health insurance, which is why the small business healthcare tax credit was created. It helps you to manage your costs by allowing you to claim 50% of the premiums that you paid as a tax write off. However, you have to meet certain criteria to qualify. Any business that wants to take advantage of the healthcare tax credit must have fewer than 25 employees, pay an average salary of $54,000 or less and provide qualifying coverage for all full-time employees, paying at least 50% of their premiums.
As long as you meet these criteria, you can file for a small business healthcare tax credit. You need to file a separate form to claim it, so make sure that you give yourself enough time to fill out this extra paperwork. It’s also worth remembering that you can claim tax deductions on your own personal healthcare costs as well.
Business taxes can be confusing at the best of times and once you add in the extra paperwork associated with your health insurance plans, you might get a bit lost. That’s why it’s best to have a professional accountant manage it for you.