If you own an independent accounting firm, the chances are good that you’ve been worried about your small business health insurance at some point. Choosing a health plan can be stressful and confusing. How are you supposed to know which is right for your business? Which option is the most cost-effective? To help you make an informed decision, we’ve outlined three options for small business health insurance.
1. Private Group Health Insurance
Private group health plans are the most traditional in terms of small business health insurance options because it’s likely what people are accustomed to. This means that all eligible employees (and possibly their dependents) are offered a plan or two that they can either take or leave.
A common source of frustration with group health coverage is cost. Generally speaking, small business owners don’t have the bargaining power of large companies, nor the volume of people to spread hefty claims across. This frequently means that employees of small businesses are stuck with higher premiums, leaving their employers to search for additional funds to help curb the cost.
If you choose this route, it’s recommended that you work with brokers to help navigate all the different insurance companies and plan options.
2. Reimburse Your Accountants
Healthcare reimbursement plans (HRPs) allow employers to offer health benefits without carrying a group plan. HRPs consumerize the health insurance benefit for employees. They enable each employee to choose an individual health insurance policy that fits his or her needs, pay for the premium, then submit for reimbursement. As the small business owner, you get to decide the allowable reimbursement amount. If employees choose a plan with a lower premium than your allotted amount, the unused money stays with your business.
3. SHOP Marketplace Plan
The Small Business Health Options Program (SHOP) is a provision of the Affordable Care Act (ACA) that extends group coverage to small businesses. This is essentially the same as carrying a private group plan, but purchasing small business health insurance through these exchanges provides additional access to tax credits.
Before signing up for a group plan in this manner, be sure to carefully read your individual state’s SHOP requirements, as they vary across the country. As an accountant, you are used to reading through dense pages of tax code, but this is an area in which you may not be familiar, so it’s best to work with a broker to ensure that your business meets eligibility requirements.
Choosing small business health insurance for your accounting firm doesn’t have to mean settling for an expensive private group health plan. Be sure to look into the SHOP exchanges and HRPs before making a final decision, as they may be more suitable options for you and your employees.
What questions do you have about small business health insurance? Leave them in the comments below. We’ll answer them.