Shopping guide for small business & group health coverage

As a business owner, you probably understand the benefits a small business health insurance plan can provide your company, employees, and even your own family. However, deciding which type of coverage to get can be confusing. eHealth is here to simplify that process for you. This step-by-step guide helps you compare small business health plans so you can make the best group health insurance choice for your specific business needs.

Step 1: Find out if your small business qualifies for a group plan

The criteria to qualify for small group insurance may vary slightly by state, but most states follow federal rules. Federal rules consider a small business eligible for group health insurance if it has:

• Two or more employees (including the owner) who live in different households
• Less than 50 employees

Step 2: Understand who you’re providing insurance to

Typically, you need to offer coverage to all full-time employees. You might not need to offer your plan to part-time employees or contract workers. However, some companies offer group coverage to part-time or 1099 employees to help them qualify for group coverage and in some cases, for better rates.

Step 3: Know what small group health insurance costs your business

Understanding if your business can afford group health insurance is another important task you should calculate ahead of time. It’s always a good idea to take your time to compare small business health plans side by side so you have a good idea of what the market rate is. eHealth has an easy-to-use plan finder tool that makes it easy to find group health options so you can find the best small business insurance for your situation.

A recent eHealth study found that the average cost per person for small group insurance was about $409 per month. Of course, factors such as insurer, benefit design, cost-sharing features like deductibles and copayments, and plan type can move the actual cost upward or downward from the average. To learn more, read about the average cost of health insurance for small businesses.

Step 4: Compare group health insurance options

Small business group health insurance comes in a wide range of plan types, including HMOs, PPOs, HMOs, EPOs, and HSAs. Choosing the right plan for your business and employees will depend on your priorities and preferences in relation to cost, coverage, and choice in care providers. A thorough business health insurance comparison may help you narrow down options. Again, as mentioned, eHealth’s plan finder tool makes it easy to browse at your convenience; or, if you need assistance from a live person, a licensed insurance agent can walk you through different choices.

Confused on what each of these options means? We’ve got a detailed explanation for each group health insurance option below:

What is an HMO plan?

An HMO refers to a “Health Maintenance Organization.” An HMO plan has a network of hospitals, doctors and other health professionals and suppliers. To receive plan benefits, members must use the providers in the HMO network except in emergencies or as approved by the plan. Otherwise, the member pays the entire bill. Another important feature of HMOs is the primary care physician, who the member’s health services through direct patient care and referrals to specialists within the HMO network. Each member selects a primary care physician from the HMO network. HMOs are often a good choice for people who want relatively low monthly premiums and out-of-pocket costs. An HMO is likely to save the most money on healthcare expenses for your business and your employees. 

What is a PPO plan?

PPO refers to a “Preferred Provider Organization.” Members are not required to select a primary care physician to coordinate their care. A PPO plan allows members greater flexibility when choosing their healthcare providers than an HMO because PPO networks are often larger than HMO networks and PPO plans pay a portion of the expenses for covered services received from healthcare providers in the plan’s network or outside the network. Usually PPO plans pay a larger portion of the cost of care from providers in the plan’s network than from out-of-network providers. PPOs often have higher premiums than HMOs, and employees usually pay higher out-of-pocket costs if they go outside the PPO network for care.  A PPO may be right for your business if you want moderate cost-savings and flexible access to providers of your choice.

What is an EPO plan?

EPO refers to an “Exclusive Provider Organization.”  An EPO is like an HMO in that it typically pays only covered services from by in-network providers. It is different than an HMO in that plan members don’t choose a primary care physician to coordinate their care. EPOs also don’t require referrals to specialists. EPO plan premiums may be lower than HMO and PPO plans, but they also may have smaller networks of participating providers. An EPO may be desirable health insurance plan option for small businesses and employees who:

• value the cost savings of a small network of healthcare providers.
• don’t want limitations on primary care doctor choice.
• don’t want a plan that requires referrals for specialist care.

What is a POS plan?

A POS refers to a “Point of Service” plan. POS plans combine the coordinated care features of an HMO with the flexibility of an HMO. Like an HMO, employees enrolled in a POS plan choose a primary care physician who will provide referrals to specialists within the plan’s network when needed. Members have low out-of-pocket costs for in-network care provided or referred by their primary care physician. However, members can choose at any time to self-direct to specialists or other health providers and pay a larger portion of the cost for the care they receive. Those who allow their primary care physicians to coordinate their care within the plan’s network save the most cost for care. A POS plan may be particularly attractive to employers and employees who want the freedom to periodically go out-of-network or self-direct to care but want the HMO level savings for most of the care they receive.   

What is an HSA plan?

HSA refers to a “Health Savings Account,” a designated savings account used as a supplement a alongside a high-deductible health insurance plans. Members contribute pre-tax money in an HSA in order to spend the funds on future health care expenses. Every year, money left in the tax-advantaged HSA rolls over and can earn interest. When a qualifying high-deductible health plan is used with an HSA, members use pre-tax dollars to pay their portion of medical care costs and receive a tax credit. HSAs may be a good choice for employers and employees who want the relatively inexpensive monthly premiums of high deductible plans and a savings account to help pay for care until their deductibles are met.  

What is an Integrated HRA?

An integrated health reimbursement account, usually just called an HRA, works somewhat similarly to an HSA insofar as it supplements group health insurance. However, it has some key differences:

• To earn tax advantages, an HRA needs to work alongside group health insurance that offers minimum essential coverage, as defined by the ACA.
• Only the employer contributes to an HRA account. While money in an HSA typically belongs to the employee, the money in an HRA belongs to the business.

What is an ICHRA plan?

ICHRA refers to Individual Coverage Health Reimbursement Arrangement plans, and it’s another cost-effective option for small business owners. These plans tend to be less expensive than the traditional group plan model. Here’s how it works: employers set aside a monthly amount for employees to be used for health coverage. The employees buy their own health insurance plan, then are reimbursed by their employer with pre-tax funds.

Some advantages of an ICHRA plan:

• These plans give employees the flexibility to use reimbursement money on the exact plan they want.
• All employees, including part-time workers, may be eligible.
• Workers can take their health plan with them even if they change jobs or leave the company.
• Many employers find it easier to control costs, and easier to manage, with this type of plan.

Step 5: Find the best carrier for your group health insurance needs

After you’ve selected what kind of plan you want, it’s time to look at carriers. A solid business health insurance comparison lets you run the numbers and see the pros and cons of each plan available in your area. eHealth works with the following top-ranked health insurance companies offering small business health insurance plans (as well as 70+ other providers):

Blue Cross Blue Shield

Blue Cross Blue Shield (BCBS) is one of the nation’s leading health insurance providers. Consisting of independent, locally operated health insurance companies, collectively Blue Cross Blue Shield Association provides coverage to approximately 99 million people in all 50 states.

Blue Cross Blue Shield insures more than 7 million employees of small businesses. It is perhaps best known for its plan types. Blue Cross Blue Shield plans include:

• BlueCard® PPO: access to a national PPO network comprised of about 96 percent of U.S. hospitals and 95 percent of licensed physicians in the U.S.
• Blue Select: access to local PPO networks that may result in greater cost-savings to businesses and employees than the national PPO network
• Blue Distinction Specialty Care – EPO-type plans that provide access to in-network Centers of Excellence
• Blue Distinction Total Care – An HMO-type plan that uses care coordination to help reduce medical costs

UnitedHealthcare

UnitedHealthcare (UHC) is a national leader in health insurance operating in all 50 states.  Recognized for its advanced use of technology, UnitedHealthcare invests about $3.5 billion in technology and innovations designed to support members and health providers. One notable example is Virtual Visits, technology that allows members to consult with doctors through their computers, tablets, and mobile devices.

Small business health insurance plan options offered by UnitedHealthCare include:

• UnitedHealthcare Choice –An EPO type plan using UnitedHealthCare’s national network. It features fixed copayments and low out-of-pocket costs for services received from the plan’s national network of providers. However, the plan usually does not pay for services received from out-of-network physicians and other healthcare providers. Primary care physician selection and referrals are not required.
• UnitedHealthcare Choice Plus –A PPO type plan that offers two levels of coverage depending  upon whether the member uses the plan’s network or not. Benefits are similar to those offered in the Choice plan when members use the plan’s network. When they use out-of-network providers, they pay higher out-of-pocket costs.
• UnitedHealthcare Options PPO – Options is a PPO plan that provides two levels of benefits and the freedom to choose any doctor without referrals and still have coverage for a portion of the services. Greater cost savings result when members use the plan’s provider network.

Humana

Humana provides integrated medical coverage for over 16 million members in 22 states, predominantly in the south, Midwest and west. Headquartered in Louisville, Kentucky, Humana was also ranked #1 in Fortune’s “Social Responsibility” category.

Small business health insurance plan options offered through Humana include three basic types of PPO-type plans to meet the various preferences of small businesses and their employees:

1. High-deductible plan with low monthly premiums
2. Traditional PPO plan with an annual deductible, copayments and coinsurance
3. Co-payment plan with no annual deductible when members use the plan’s network providers  

Small business health insurance plans from Humana include:

• Canopy Health Plan – For small businesses with between two to 50 employees, this plan features deductibles, coinsurance and copays for most covered services.
• Simplicity Health Plan – This plan may be optimal for small businesses who prioritize low out-of-pocket costs and want to know these costs up front. Employees pay a flat copay for network provider services covered by the plan after they have met an annual deductible.
• Copay Health Plan –A PPO plan, this plan may be a good fit for small businesses who want employee coverage for routine care and other covered services.
• High Deductible Health Plan – A suitable option for generally healthy employees who receive annual preventative care and also want full medical coverage in case of a major health event.

Humana plans can be paired with an Access Spending Account funded with tax-deductible contributions to be used for out-of-pocket expenses.

Kaiser Permanente

Kaiser Permanente offers health insurance in eight U.S. states and the District of Columbia. Kaiser Permanente has received awards and recognitions from J.D. Power for member satisfaction. The California Healthcare Quality Report Card gave Kaiser Permanente four out of four stars for its Northern and Southern California regions.

Kaiser Permanente consists of the Kaiser Foundation Health Plan, Inc. (KFHP) as well as its regional operating subsidiaries; regional Permanente Medical Groups; and Kaiser Foundation Hospitals.

Kaiser Permanente offers a variety of small business health insurance plans, including:

• Traditional HMO plans
• Deductible HMO plans with lower premiums
• HRA and HSA-Qualified plans
• POS plans
• PPO plans

Kaiser Permanente offers affordable managed care options for small businesses.

Anthem

Anthem is the largest managed health care company within the Blue Cross Blue Shield Association, serving 14 U.S. states and insuring approximately 40 million members.

Anthem offers a wide range of group plans for small businesses.  Anthem small group health insurance plans are locally administered within a particular state served by Anthem and use local or regional provider networks. In addition, small businesses can purchase the BlueCard® program for nationwide access to participating hospitals and doctors.

Some of the popular Anthem plans for small business include:

• Traditional HMO plans
• Select network HMO plans, which usually have a smaller network of participating providers than the traditional HMO, often concentrated in specific city and surrounding counties.
• PPO plans
• POS plans
• Consumer Driven Health Plans, which are high-deductible plans that can be used with a Health Savings Account (HSA).

Anthem is also recognized for flexible funding arrangements in many states.

Aetna

Aetna has been named on Fortune’s World’s Most Admired Companies list, and ranked No. 4 in the “Health Care: Insurance and Managed Care” category. Aetna offers small businesses a wide range of group health insurance options that include indemnity plans, HMO, POS and PPO plans as well as high-deductible plans. Three small business health plans Aetna offers include:

1. Open Choice—A PPO that provides access to a nationwide network of participating hospitals and doctors.
2. Traditional Choice – A traditional indemnity plan that typically does not have a network of participating providers and does not require doctor referrals to specialists for members to receive coverage. 
3. Aetna HealthFund One-to-One – An HSA or HRA that can be linked with the AETNA group health plan of your choice.

Step 6: Get a quote online or call a licensed eHealth broker for help

Hopefully, this business health insurance comparison was a good starting place for your own search into different coverage options. At eHealth, both the online quote system and licensed brokers can help you compare small business health plans in your own local area. It’s easy to get a quote with eHealth and find the best small business insurance option for your company. Remember, there is no cost to you for these services, and you are under no obligation to purchase.

Health insurance brokers at eHealth may perform a variety of services:

• Business health insurance comparison, including a breakdown of benefits, premiums, and insurance companies
• Analysis of the cost impact of various health insurance choices to your business
• Collaboration with you and your chosen insurer on health plan implementation and ongoing service to resolve any issues after the plan is in place for your company and employees
• Assistance educating your employees on how the plan works
• Assistance with plan renewals or new coverage

Call us at the toll-free number listed to speak with an eHealth licensed insurance agent, who can walk you through choices that may fit your needs. You can also start comparing customized group health insurance quotes for your business at any time online.

This article is for general information and all plans listed in this article may not be available in your area. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.