Small Business Health Insurance

Small Businesses approach health insurance in a variety ways. Most commonly, owners will offer their employees various options from Health, Dental and Life. Although offering benefits to employees is becoming more common place, there are still owners who may not offer plans to their employees at all. This can be for a plethora of issues. 

The most common is coupled with cost of offering their employees health insurance and the lack of education around even knowing how to get a basic quote. There are many ways small business owners approach offering insurance to their employees. Here is some basic information around what to expect when getting a quote and offering health insurance to your small business employees.

• Helps small businesses retain and recruit employees
• Reduces employee’s cost of living expenses, which can increase workplace productivity and satisfaction
• All premiums paid for by the employer are tax deductible

Offering health insurance to employees provides a stronger sense of commitment to the company from the employee’s perspective. In a competitive job market where everyone is struggling to fill positions, offering health insurance can be an easy way to attract and retain top talent. Employees will tend to be healthier, which leads to less sick days and a more productive work force. Another added bonus for an employer looking to offer health insurance to their team is that all the premiums paid for by the employer are all tax deductible. 

Traditionally, employers cover a minimum of 50% of an employee’s monthly premium. For example, if an employees monthly premium is $250, the company will cover 50% of that, $125. The employee will be responsible for the rest. In a competitive job market, some employers are willing to pay 100% of their employees monthly premiums. Each insurance company in California is different and does impose employer contribution minimums for each group policy, For a traditional group plan, insurance providers in the state of California require a minimum employer contribution of 50%.

On average, most employers choose somewhere between 50% to 85%. Some employers will even help cover a portion of the dependent’s health insurance premium as well. Covering dependent’s is not mandatory in the state of California and is up to the employer, however, is a great way for a company to separate itself in a competitive job market.

Unfortunately, Group Health Insurance does not include coverage for dental and vision. Fortunately, there are plans that include benefit riders that can be added to a group health insurance plan. These riders will add an additional cost to a group health insurance plan. During the quote process, you will have the chance to review additional insurance plans and riders that are available in your area.

• A copy of your current group health insurance plan and all participants who are enrolled
• The name and date of birth of all potential participants in the plan
  • This can include owner, employees, spouses and dependents

• Between 1 and 50 employees who are permanent, active, full time employees for at least 50 percent of the preceding calendar quarter or preceding calendar year
  • Excluding spouses and owners
  • Employees who average 30 hours a week are considered full time
• An employee who is eligible for the group plan is someone who receives a W-2 but is not an employer or spouse
• Anyone who enrolls for the group plan can not be in another group or have their own insurance
• All employees must be offered the opportunity to enroll in the health insurance plan
• All employers must have a workers’ compensation policy unless it is not required by law.
• The purpose of forming the business must not be for buying a health plan or insurance coverage

• DE 9C/payroll for pay rolled employee, make sure to exclude spouses and owners as they do not count towards meeting your group numbers
• California business license or fictitious business name filing.
• A current jointly filed IRS 1040 form with separate Schedule C forms for husband and wife.

If you have any further questions about starting a small group health insurance plan, feel free to contact us at (760) 509-1070. We would love to use our expertise to fully customize a health insurance policy for you and your employees.