What Small Business Owners Need to Know About Health Insurance

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work meetingIf you are a small business owner (less than 50 full-time employees) in Nebraska looking for information about the coming deadlines and making sure you have all your ducks in a row, you’ve come to the right place. If you have over 50 employees, you may be required to provide health insurance options for your full-time employees, and this information may not apply to you.

However, if you are a small business owner with fewer than 50 full-time employees, this blog will serve as a quick rundown of your options.

Group Health Insurance. This is the traditional option wherein you, the business owner, purchase health insurance on behalf of your employees and then split the costs with them. The SHOP marketplace offers an increased number of plans and often, smaller businesses are eligible for valuable tax credits.

Typically this option will work best when there is a large number of employees with similar needs, as the plans won’t vary too much in what they offer. When considering a group insurance plan, you need to be sure that what it offers matches very closely with the needs of the majority of your employees. Otherwise, you’ll likely be paying for services that aren’t being used and/or some employees with greater needs won’t be able to have them met without spending too much out of pocket.

Defined Contribution Plan. As the varieties of plans continue to diversify, more employers are choosing to get employees insured through a “defined contribution plan,” meaning that the business owner chooses a set amount that they will pay employees monthly to contribute towards their total individual healthcare costs.

Aside from the fact that individual plans typically cost about 20% less than group plans, this option presents a couple other benefits. As opposed to purchasing a group plan, this allows each individual employee to be responsible for getting their own coverage that they feel suits them best. Though it may not seem like a traditional benefit the way a group health insurance plan might, it certainly allows both employer and employee and increased degree of flexibility.

These are by no means the only ways to help your employees get health insurance coverage. But for a small business owner with fewer than 50 employees, these two options make a lot of sense. If you have questions about what route might be best for your small business, don’t hesitate to contact us here.

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