Choosing the Right Small Business Health Insurance | Fora Financial Blog
How to Choose the Right Small Business Health Insurance
September 18, 2017

How to Choose the Right Small Business Health Insurance

Health insurance is a topic that seems to be constantly in the news. Whether it’s the cost of premiums or the latest administration’s attempts to repeal ‘Obamacare,’ it’s become a big talking point for small businesses.

Whether you agree with the administration’s ideas or not, it is evident that employees place high value on health insurance. In fact, per a study by Fractl, candidates think it is the most important benefit to consider when deciding between taking a higher-paid job or a lower-paid one with better benefits.

As a business owner, your health insurance plan could determine whether you retain a great employee or lose them to a competitor. In this post, we’ll help you break down the numerous aspects that you’ll need to consider when choosing your business’s health insurance plan.


Price will undoubtedly be a factor when choosing a health insurance place for your business. With the 2016 average annual employer-sponsored premium coming in at $6,435 for single coverage, it’s important to think about. Plus, it’s worth remembering that you get what you pay for, so opting for an inexpensive plan could be detrimental to you and your employees in the long-run. There is likely a reason why certain business health insurance plans are cheaper than others, so always research what is and isn’t covered.

Splitting the cost

In the same study, only 12 percent of employers said that they cover the full cost for single coverage, meaning that employees usually have to pay something. How much they’re willing to pay will depend on various factors, so start an open dialogue to find out what benefits are important to them and explain what you can realistically afford to cover.

Number of employees

The number of employees you have could be another factor in deciding which business health insurance plan is right for your company. If you only have a couple of employees, then a Healthcare Reimbursement Plan (HRP) could be more cost-effective than a company-wide plan. In many ways, the fewer employees you have, the greater the need for small business health insurance is. For instance, any time taken off by your employees for medical reasons will have a bigger impact on your bottom line. Having fit and healthy employees and the right insurance policy in place can reduce this risk.

Buying the product

Health insurance for small businesses can be a complex issue, and you’ll have to decide how much time and effort you can afford to spend researching it.

If your time is limited, then the Small Business Health Options Program (SHOP) could be the best choice. Simply select your state, input a few details and then choose from either the Bronze, Silver, Gold or Platinum levels of coverage to see the prices available.

A Private Healthcare Exchange (PHE) works in a similar way to SHOP, but it’s run by privatized businesses rather than states. You’ll have to spend a bit more time researching which PHEs are available and whether the costs stack up.

Going directly to an insurance provider is the final way of buying health insurance for small businesses. This could save you money, but it will take more time as you’ll have to explain to every provider what your requirements are. Also, some providers do not sell directly.

Customer service

The final point to consider is customer service. When medical attention is needed, how easy is it to deal with the insurance provider? What is access like to healthcare professionals through the insurance plans offered? Will your employees have telephone support, or will they only be able to visit a small number of healthcare professionals in your region? The provider’s levels of customer service should be researched before you sign up to any plans. In addition, you should ask local businesses who they use for their small business health insurance.

Selecting the right health insurance for your small business is critical, not just from a regulatory point of view, but also from an employee retention and recruitment perspective. Hopefully after reading this post you’ll be able to pick the right plan for you and your employees!

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].