Health Insurance for Small Business Owner

Health insurance is a pledge by an insurance company to pay for one’s health care expenses in exchange for payment of fees.

Obtaining a health insurance for small business owners is strenuous because of the high cost of insurance policies.

There are two options for small business owners in choosing what health care insurance plan to purchase. If the owner only needs health insurance for his family, the best option would be is to purchase an individual or family health insurance plan. But if there is a need to provide coverage for employees, Group health insurance policy is the ideal plan to take. The major difference between individual or family health insurance and group insurance policy is actually the cost. Family health insurance is relatively less expensive than group policy because each individual in the family must be qualified. In group policy, the insurance company must accept each member covered which makes it more expensive than individual or family policy.

Since it is only a small business, the owner doesn’t need to buy policies in volume which make it more expensive for them than to those companies who purchase policies in volume. To achieve the purchasing power of the large companies, Group health insurance policy is a choice. This can be achieved by looking for other small businesses.

Group Purchasing Arrangement or GPA helps small business owners by bringing them together to achieve the purchasing power of large groups to have lower insurance premiums. In the United States, several states have mandated Group Purchasing Arrangements (GPAs):

  • Arkansas
  • Kansas
  • Montana
  • New York
  • New Mexico
  • Ohio
  • Texas
  • Wisconsin

The businesses not located in any of the states listed above can still obtain lower insurance premiums by looking for other individuals or groups of employers who need the same. Owners can also search for other business owners who have already established Group Policy Arrangements.

Another factor to consider in choosing Health Insurance Company is the credibility of the insurance company itself. Owners should also make research on their prospect insurance company. The insurance company must provide quality service to its clients and preferably, it must have a good reputation name in the industry. Seeking advice from other business owners who already have chosen their insurance company will help the owner decide on which company to choose.

Once the owner has already acquired a health insurance policy, reducing the cost of health insurance is another thing. Having a health insurance is good, but reducing the cost of it is better. The owner can promote health among the employees to prevent diseases. The owner can also consider opening up a health savings accounts because these have tax exemptions, but this can only be used to pay for medical expenses.


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