For small business owners operating in Northern California, there are a number of benefits to offering their employees health insurance. Various studies have shown that staffers who work for companies that provide health benefits are happier, healthier, more productive and more loyal than their uninsured counterparts. However, there are a few factors that small business owners should consider before making their way into the healthcare marketplace.
Understand Your Company’s Needs
Within the healthcare marketplace, insurance plans are divided up into four tiers that are differentiated by how health care costs are divided between employee and employer. Bronze plans are divided so that the insurance company pays for 60 percent of medical costs while the employee covers the remaining 40 percent out-of-pocket. Silver plans are divided 70/30, Gold 80/20, and Platinum 90/10.
It’s also essential for an employer to understand the specific benefits that are covered under a group health insurance plan. Pricey copay costs for things like doctor’s visits, hospital stays, prescription drugs, and inordinately high deductibles can quickly turn what was intended to be a benefit into a disincentive.
HMO vs. PPO
Eighty percent of American healthcare plans are either HMO (health maintenance organization) or PPO (preferred provider organization) plans. HMOs require subscribers to select the primary care providers, only covers providers and facilities within their network, and require subscribers to get approval from their providers when they wish to consult a specialist.
Alternatively, PPOs don’t require primary care providers or specialist referrals. Although PPOs do cover out-of-network providers and facilities in some cases, utilizing preferred network resources requires a lower out-of-pocket cost. When choosing between HMOs and PPOs, it’s important to consider coverage area and how your staff values the importance of having a primary care provider and direct access to specialists.
Don’t Undermine Your Company’s Future
Obviously, cost will play a significant role in in an owner’s choice of group health insurance plan. Paying for a plan that has a detrimental effect on profitability isn’t a good deal for employers or employees. However, going with a cheap plan that doesn’t meet your team’s needs can be disastrous.
A recent Glassdoor study found that workers who feel they have low-quality health insurance have a lower rate of job satisfaction. As low job satisfaction can have a negative effect on employee performance, morale, and retention, choosing an insufficient health plan could be a major blow to your company’s long-term economic viability.
There is no one-size-fits-all solution for every company. When looking to purchase group health insurance for their companies, small business owners need to understand their company’s needs and the long-term economic viability of their different options.
Canopy Health is a community of caregivers creating an integrated healthcare experience where quality care and coverage are provided by an alliance of top caregivers throughout the Bay Area. They offer refreshingly clear, human care that is achieved by making each unique member’s journey predictable, transparent, and cost-effective.
For more tips and inspiration for small business owners, visit CBS Small Business Pulse San Francisco.