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Building a successful business is hard work. Finding affordable small business health insurance doesn’t have to be. All small businesses face special challenges when it comes to finding and getting health insurance coverage. Luckily, recent health care reform legislation provides small businesses with special opportunities to secure affordable health insurance.
When evaluating your small business health insurance options in Colorado, you should immediately compare the costs and benefits of the following three options:
Offering Traditional Small Business Health Insurance Coverage,
Offering a Defined Contribution Health Plan that Reimburses Employees for Individual Health Insurance Coverage, and
Offering Nothing
There are two primary categories of health insurance for small businesses to choose from:
Individual health insurance,
Group health insurance.
Individual health insurance plans are health insurance plans purchased by individuals to cover themselves or their families. Anyone can apply for individual health insurance. Small business owners who can’t offer group coverage
Group health insurance plans are a form of employer-sponsored health coverage. Costs are typically shared between the employer and the employee, and coverage may also be extended to dependents. In certain states, self-employed persons without other employees may qualify for group health insurance plans.
Whether you’re looking at individual health insurance or group health insurance, there are several different types of health plans available. The four you should absolutely know are:
PPO Health Insurance Plans,
HMO Health Insurance Plans,
HSA-Qualified Health Insurance Plans, and
Indemnity Health Insurance Plans.
The plan type that is best for you and your employees depends on what you and your employees want, and how much you are willing to spend. Here’s a brief review of the four popular types of health insurance plans:
PPO or “Preferred Provider Organization” plans are the most common. Employees covered under a PPO plan need to get their medical care from doctors or hospitals on the insurance company’s list of preferred providers in order for claims to be paid at the highest level.
HMO stands for “Health Maintenance Organization.” HMO plans offer a wide range of
HSA-qualified plans are typically PPO plans designed specifically for use with Health Savings Accounts(HSAs). An HSA is a special bank account that allows participants to save money – pre-tax – to be used specifically for medical expenses in the future. Section 105 Healthcare Reimbursement Plans (HRPs) are often used in place of HSAs due to their advantages for employers.
Indemnity plans allow members to direct their own health care and generally visit any doctor or hospital. The insurance company then pays a set portion of the total charges. Employees may be required to pay for some services up front and then apply to the insurance company for reimbursement.
Colorado Health Insurance Coverage:
Group Plans: There is a maximum 6-month look-back/12-month exclusionary period for pre-existing conditions on enrollees that do not have prior coverage. Benefits will vary depending on the chosen plan. Pre-existing health conditions covered.
Individual Plans: Assorted plans depending on medical needs. There is a maximum look-back period of 60 months and a maximum exclusion period of 24 months for pre-existing conditions on enrollees that do not have prior coverage. Elimination riders are permitted. Limits on pre-existing health conditions may apply.
COBRA: Coverage available for 18-36 months depending on qualifying events. Benefits are what you had with your previous employer. Pre-existing health conditions covered.
HIPAA: Benefits are based on
HIPAA: Premium assistance that pays employer-sponsored health insurance or Cobra premium available.
Colorado Health Insurance Eligibility:
Group Plans: Guaranteed coverage for companies with 2-50 employees. Eligible employees must work at least 30 hours a week.
Individual Plans: Eligibility is subject to medical underwriting. If you are denied coverage for a medical condition, you may be eligible for AHIP, or PCIP.
COBRA: Guaranteed coverage available for employees who work for businesses with 20 or more employees. Employees have 60 days from
HIPAA: Must have had 18 months of continuous coverage and completely exhausted Cobra or state continuation coverage. Must not have lost coverage due to fraud or non-payment of premiums. You have 63 days to enroll.
HIPAA: Must qualify for Medicaid and have access to Employer-Sponsored Insurance or Cobra.
Colorado Health Insurance Monthly Cost:
Group Plans: Costs depend on employer contribution and the + 20% of the Insurance company’s Index rate.
Individual Plans: Costs for Individual coverage vary. There are no rate caps.
COBRA: Costs vary between 102% to 150% of group health rates.
HIPAA: Premiums will depend on
HIPAA: Reimburses the full employer-sponsored insurance premium amount by check monthly. Pays the insurance company directly for people on
*Source: www.coverageforall.org
Colorado: Average “Single” Premium per Enrolled Employee
|
Colorado % |
Colorado $ |
US % |
US $ |
Employee Contribution |
20% |
$1,059 |
21% |
$1,090 |
Employer Contribution |
80% |
$4,153 |
79% |
$4,132 |
Total |
100% |
$5,212 |
100% |
$5,222 |
Colorado: Average “Family” Premium per Enrolled Employee
|
Colorado % |
Colorado $ |
US % |
US $ |
Employee Contribution |
31% |
$4,646 |
26% |
$3,962 |
Employer Contribution |
69% |
$10,204 |
74% |
$11,060 |
Total |
100% |
$14,850 |
100% |
$15,022 |
Colorado: Average “Employee-Plus-One” Premium per Enrolled Employee for Employer-Based Health Insurance, 2011*
|
Colorado % |
Colorado $ |
US % |
US $ |
Employee Contribution |
30% |
$3,175 |
27% |
$2,736 |
Employer Contribution |
70% |
$7,350 |
73% |
$7,593 |
Total |
100% |
$10,525 |
100% |
$10,329 |
Colorado: Average Per Person Monthly Premiums in the Individual Market, 2010*
|
Colorado $ |
US $ |
State Average Premium |
$194 |
$215 |
*Source: statehealthfacts.org
Are you ready for health care reform ("ACA") in 2014?
Today, employers are more stressed than ever. Here’s why:
The business environment is uncertain,
Employer-sponsored health insurance costs increase annually, and
New fees and penalties take effect next year, and most employers don’t fully understand how this will affect their financials.
It is time for employers to examine the specifics of
The more change and disruption your business can embrace, the more cost savings (for both the company and your employees) you will be able to realize over the long term. In order to embrace this change, you must be familiar with the key aspects of ACA. For many small businesses, the solution to
Listed below are key ACA components to consider when choosing small business health insurance.
Beginning 2014, individuals will have access to tax subsidies to buy private health insurance through the public exchange. These subsidies will be for those who enroll in a silver plan through the exchange. The subsidy caps the cost of individual health insurance at 2% - 9.5% of their household income if their household income is less than 400% above the federal poverty line. This equates to roughly $90,000 per year for a family of four.
Click here for more information on the premium subsidies.
The Individual Mandate requires most individuals to purchase health insurance, or else pay a penalty on their tax return each year. The intention of the individual penalty is to reduce the "Free Riding" effect in the health insurance market (a free rider is someone who is healthy and does not purchase health insurance until they need it.
Click here for more information on individual tax penalties.
Small businesses with up to 25 full-time equivalent employees may qualify for a tax credit for offering employee health benefits. The credit is broken
Click here for more information the tax credits.
Starting January 1, 2015, Employers with 50 or more full-time equivalents who do not offer minimum essential coverage can face monthly penalties if at least one employee uses a premium tax credit to obtain health insurance through the state health exchange. If you do not have more than 50 employees, you are not subject to these penalties.
Click here for more information on the business tax penalty.
Defined Contribution Plans allow employers to offer health benefits without offering a traditional group health insurance plan. Instead of paying costs for a specific group health plan, employers allocate tax-deductible monthly allowances for their employees to spend on private health insurance and other medical expenses tax-free.
Features of defined contribution plans include the following:
Employee Choice – employees choose a health insurance plan that best fits their needs.
Fixed Cost – employers control health care costs by allocating fixed monthly allowances for their employees.
Savings – employers using Defined Contribution Plans typically cost less than group health plans which results in
Immediately compare the costs and benefits of the following three options:
Offering Traditional Small Business Health Insurance Coverage,
Offering a Defined Contribution Health Plan that Reimburses Employees for Individual Health Insurance Coverage, and
Offering Nothing.
Disclaimer: The information provided on this website is general in nature and does not apply to any specific U.S. state except where noted. Health insurance regulations differ in each state.
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