Own a Small Business? Medical Insurance Basics

Many small business owners are concluding that they can’t qualify for conventional business medical insurance policies at rates they can afford.  As a result, they fail to obtain adequate health insurance for themselves and their employees.  Many are going without small business medical insurance entirely. Those who own home-based businesses struggle even more, as the home based business owner is even less likely to have enough employees to qualify for affordable, traditional business medical insurance. Unlike large corporations, small business owners can't buy medical insurance in volume, and will often be charged unaffordable premiums for the same or even inferior medical coverage.

Own a Small Business?  Medical Insurance Basics

Because the number of individuals who run small businesses is growing, many insurance companies actually offer insurance that is tailored to fit the needs of small businesses. The competition for the small business medical insurance policy dollar is intensifying. If you shop comparatively, you may find that the increased competition results in better terms for you and your small business. When several insurance companies are competing in the same market, they will often entice potential customers with special promotional offers that deliver attractive terms.

Small business owners can also lower premiums by increasing deductibles and raising the co-payment for select medical services such as prescriptions and doctor's visits. While this is a more streamlined health insurance services package than the full spectrum offered by most big corporations, higher deductibles and higher co-payments are often viewed as manageable contributions by employees who appreciate having decent basic medical coverage. Experts agree that in almost all cases, some medical insurance is better than none at all.

There are states that mandate group purchasing arrangements (GPA's) for small businesses in need of medical insurance. If you state is not among them, you might consider forming your own GPA or joining one already in existence. Check with local trade associations, business organizations and the Chamber of Commerce. Banded together, a buying group of small business owners become larger and more influential while negotiating the terms of their small business medical insurance policies with the insurer. A group of small business owners negotiating collectively are in a stronger position to demand the best deal.

Reinsurance is another potential option for small business medical insurance coverage.  If your state is among those with a reinsurance program, it is worth investigating. Medical reinsurance programs use subsidies to help mitigate the high cost of medical insurance premiums for the small business and lower income segments of the population.

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