Employees that have quality health insurance are more satisfied with their jobs, more loyal to their employers, and more productive, so there is a major incentive for San Francisco-based small businesses to make great benefits available to their workers, especially great health coverage. However, in order to find health care plans that best suit their needs, it’s important for small business owners to understand the different categories of health insurance.
There are four different types of health insurance available on the federal healthcare exchange, and they’re segmented by how the cost of the plan is divided between employer and employee. Additionally, each category is named after a different type metal, so it’s common to see the insurance plan categories called “metal levels.”
In order to determine what best serves your company’s needs, you must first understand the options that are available.
Bronze category health plans are those in which the employer pays 60 percent of care costs while the employee pays the remaining 40 percent. Bronze plans are typified by having low premiums but high out-of-pocket costs. They also have the most expensive deductible of the four categories. If your staff is mostly made up of young, single workers, a bronze plan may be the right one for you as they will have lower routine medical costs than other demographics.
For silver plans, the company pays for 70 percent of healthcare costs and the worker pays for the remaining 30 percent. Silver plans have relatively inexpensive premiums and lower out-of-pocket costs and have fairly expensive annual deductibles. If your workforce mostly consists of older Millennials and Generation Xers, a silver category plan might be ideal for your business.
With gold plans, the employer is responsible for 80 percent of healthcare costs while the employee is responsible for the remaining 20 percent. These plans have expensive premiums but low out-of-pocket costs and deductibles. Companies that employ a staff of middle-aged or older employees with chronic conditions would best have their needs met by a gold plan.
Finally, platinum category plans require employers to pay 90 percent of medical costs and employees to cover the remaining 10 percent. Platinum plans have the highest premiums of the four categories and the lowest out-of-pocket and deductible costs. While these plans are designed for companies that have a workforce that requires a great deal of regular medical care, some health care providers have found that the costs associated with platinum plans are not practical for companies or employees.
Outside of the metal levels, there is one other type of healthcare plan available: catastrophic coverage. These plans have extremely low premiums but the annual deductible is $7,150. As these plans only cover three doctors care visits annually with no out-of-pocket costs, they are effectively a form of worst-case scenario insurance. These plans are best suited for companies that employ single workers under the age 30 with no ongoing healthcare needs and a hardship exemption from the individual mandate portion of the Affordable Care Act.
As you can see above, no matter how out-of-reach a healthcare plan might feel, there is a solution available for all small businesses.
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.