3 Questions To Ask Before Choosing Small Business Health Insurance

As a growing company, choosing the best health insurance plan is important in making sure your employees are well taken care of. The right plan is not just about the price, but also how useful it is for your employees.

Before determining the right health insurance for your employees, thinking about these three questions could help you make the best decision for your team.

1. How Much Does the Health Insurance Plan Cost?

The biggest concern around choosing health insurance plans tends to be the cost, both for employees and for your small business. Your company can go with a low-deductible, high-premium plan, which ensures that out-of-pocket costs are low. These high premium plans may be expensive upfront for either the employee or the company, depending on how much the company chooses to contribute toward the premium. You can also go with a high-deductible, low-premium plan, which ensures that the upfront premiums costs are much lower.

Your company demographics may influence which option is better. For example, a younger demographic may be willing to pay higher deductibles because they don’t go to the doctor often. On the other hand, if your company's age bracket is older, employees may want as much covered as possible.

When evaluating different small business health insurance plans, look for the four “metal tiers” that offer guidance on how much the health insurance covers.

• Bronze: 60% Covered; 40% deductible

• Silver: 70% Covered; 30% deductible

• Gold: 80% Covered; 20% deductible

• Platinum: 90% Covered; 10% deductible

Alternatively, some insurance companies use the following format:

• No Deductible: The premium covers everything

• Low Deductible: The premium covers a significant amount with some employee out-of-pocket expense

• High Deductible: The premium only covers a small amount with a significant amount of employee out-of-pocket expense.

However, insurance costs aren’t only measured by how much the premium is. You also need to look at the total deductible and the out-of-pocket limit. The total plan cost equals the premium plus the deductible. So while a plan might seem really cheap from a premium perspective, if the total deductible is factored, it may be better for your employees to have access to other options.

There’s also the out-of-pocket limit. Before the ACA, this was a much more important number to keep track of. However, with current health insurance regulation, the maximum out-of-pocket limit for an individual in 2024 is $9,450 and $18,900 for a family.

2. What Does the Health Insurance Plan Cover?

Cost is an important aspect of the health insurance plan, but it’s not the only thing that matters. It’s important to also track what the insurance covers, because the more services your employees can have access to, the more attractive the plan could be..

Most plans will cover the following, at the minimum:

• Outpatient care: Treatment without being admitted to the hospital

• Emergency room visits

• Inpatient care: Treatment you get in the hospital

• Pre- and post-natal care

• Mental health and substance use disorder services

• Prescription drugs

• Treatments for chronic conditions

• Lab tests

• Preventative services, such as vaccines

• Pediatric services

Dig in to see how much health insurance your employees can access on different plans. Keep in mind there could be caps and rules in place to prevent overuse of certain services.

3. Have You Explored The Networks of Doctors?

Before selecting a plan, always look at the network of doctors. Health Maintenance Organizations (HMOs) require employees to only visit approved doctors and oftentimes require employees to get approval to see another doctor. These tend to be cheaper than the Preferred Provider Organization (PPO), for example, which lets employees choose their own doctor. Many insurance plans will cover out-of-network doctor’s visits, but these visits are typically more expensive because the carriers don’t have arrangements with the doctor.

Again, consider the demographics and geography of your team. You’ll likely consider different plans if all your employees work in one office than you would if you employ a remote team spread throughout different cities or states.

When choosing small business health insurance plans, it’s important to consider your individual team and what is most valuable to them. Having a strong health insurance offering can help gain and retain top talent for your growing business.

Provide Small Business Health Insurance Through Justworks

Justworks helps growing small businesses provide access to quality health insurance at affordable rates. Your employees will have access to a variety of health insurance plans including no deductible, low deductible, or high deductible. Contact us to find out how we can work together to set your small business up for success.