Small Business Medical Insurance Basics For Quality Coverage

Many small business owners feel that small business medical insurance is simply out of reach for them, and that they cannot afford it. As a result, many small business owners fail to obtain adequate health insurance for themselves, their family and their employees. So basically, many small business owners have no health insurance at all; likewise, the employees that work for these small businesses also usually have no health insurance.

The problems for owners of home-based businesses are even more exaggerated and more perplexing, because most home-based businesses do not have enough employees to qualify for small business group rates for small business medical coverage.

Why Small Business Medical Insurance Is Expensive

Because of the simple fact that small businesses generally employee only a few employees, small business owners are not able to take advantage of the highly discounted health plans made available to large corporations. Furthermore, premiums for small business health coverage programs are generally higher, while providing significantly less coverage than large corporate medical insurance programs.

More Options for Business Medical Insurance

Every year the number of individuals, or entrepreneurs, that start new small businesses increases; therefore, some insurance companies are starting to provide healthcare insurance programs tailored specifically for micro businesses or small businesses. This particular niche in the healthcare insurance industry is becoming more and more competitive every day. As a result, coverage provided under these plans is improving - while becoming somewhat more affordable.

Saving Money on Business Medical Insurance

Owners of small businesses can significantly lower premiums on group policy by adjusting, or increasing, deductibles paid by the employee. Furthermore, premium rates can be reduced by setting the copayment amount for certain medical services such as prescriptions or doctors visits at a slightly higher level.

This may not be the type of full service healthcare coverage many people may expect or desire; however, it does provide for something that is much more affordable. Higher deductibles and copayments will generally be viewed by employees as manageable; in addition, most employees are aware that some coverage is better than none at all.

Group Purchasing Arrangements

Some states require the use of group purchasing arrangements, or GPAs, for small businesses that wish to purchase medical insurance coverage for their employees. If you live in a state that does not require GPAs, you might consider creating your own GPA or finding out if there is one already in existence.

A GPA can be created by simply joining, or banding, together several small businesses to form a common interest group for the purposes of purchasing reduced priced health insurance policies. A group of like-minded small-business owners, that are associated together, in such a group will be much more effective in negotiating better rates and terms for health insurance policies. In short, your GPA will always receive a better rate than your business alone could manage.

Reinsurance

If your state is among those that offer reinsurance programs, these programs can offer a significant reduction in the cost of medical insurance coverage provided by small businesses to their employees. State medical reinsurance programs are subsidies that are used to help control the high cost of medical insurance premiums paid by small businesses and individuals with lower incomes.