How Does Small Business Health Insurance Work?

How Does Small Business Health Insurance Work?

Business owners can offer their employees health insurance coverage through small business health insurance, also known as group health insurance. But how does small business health insurance work? Whether you have a few employees or more, this type of health insurance plan offers more than just healthcare coverage. Small group plans also enhance employee retention and attraction.

In addition to health insurance coverage, you’ll also have access to group benefits that can enhance your employee’s quality of life. These may include wellness programs, tax-free contributions into flexible spending accounts, and additional plans.

The Workings of Small Business Health Insurance

The workings of small business health insurance rely on four components. These are:

·        Coverage

·        Number of employees

·        Employee premiums

·        Enrollment period


One of the first things you need to have a small business health insurance plan is to qualify as a small business. Any reputable insurance company will generally guarantee your coverage if you’re eligible for a small business health insurance plan.

If you have the choice of a small business health insurance, all eligible employees of your small business will have access to the new plan, regardless of any existing health conditions they might have.

Number of employees

The second most important aspect of small business insurance is employees. To qualify, you need at least one employee on your payroll (not including yourself or your spouse). However, every state has different rules. This also varies from one insurance company to another. Before settling on a plan, seek the advice of a licensed agent to confirm if you qualify for coverage in your area.

Employee premiums

To qualify for small business health insurance, you must pay at least 50% of your employees’ monthly health insurance premiums. The minimum deductible can vary depending on the particular state or insurance company. You may also opt to contribute toward your employees’ dependent premiums.

Enrollment period

You can shop for health insurance year-round as a small business owner. Once you purchase a plan, your premiums will usually stay the same for the entire year. There is no need to wait for an open enrollment period.

Throughout the year, you can add new employees or family members to your company’s healthcare plan or drop people who have left your company’s employment. It’s generally possible to renew coverage at the end of the year or select a different plan for the new year. Make an appointment to find out more about small business health insurance.