Guide to Small Business Health Insurance

Comparing Individual & Family and Small Business Plans

There are two primary categories of health insurance for small business owners and self-employed persons to choose from: 1) individual & family or 2) small business/group health insurance. Almost everyone can apply for individual & family insurance, and depending on the number of employees you have and the regulations in your state, you may qualify for small business/group coverage. In some states self-employed persons without any additional employees may only be eligible to apply for individual & family coverage.

Individual and family plans

These are health insurance plans purchased by individuals to cover themselves or their families. Almost anyone can purchase an individual or family health insurance plan, and it's no longer possible to be declined based on your medical history. You generally need to enroll during the Obamacare annual open enrollment period, which typically runs from November 1 through January 31. Outside of open enrollment, you may only be able to enroll after you've experienced a qualifying life event such as marriage or divorce, the birth or adoption of a child, the loss of coverage, or moving to a new coverage area. Government subsidies may be available to help qualifying persons cover their monthly health insurance premiums.

Small business/group health insurance plans

Sometimes referred to as "small business plans" or "group health insurance," this is employer-sponsored health coverage. Costs are typically shared between the employer and the employee, and coverage may also be extended to dependents. In certain states, self-employed persons without other employees may also qualify for small business/group plans. There may be special tax incentives available to some businesses providing group coverage to employees, and no one in a group can be turned down due to a pre-existing medical condition.

The top four health plan types

Whether you're looking at individual and family or small business/group health insurance, there are several different types of health plans available. Some are designed to provide you with as many choices as possible when it comes to doctors and hospitals. Others are designed to keep costs in check by limiting you to a set group of "preferred" doctors and hospitals. Which type is best for you will depend on how much convenience and protection you want, and how much you are willing to spend. Here's a brief review of four popular types of health insurance plan:

PPO

PPO stands for "Preferred Provider Organization." Like the name implies, persons covered under a PPO plan generally need to get their medical care from doctors or hospitals on the insurance company's list of preferred providers in order for claims to be paid at the highest level. It's your responsibility to make sure that the health care providers you visit participate in the PPO. Services rendered by out-of-network providers may not be covered or may be paid at a lower level.

A PPO plan may be right for you if:

• Your favorite doctor already participates in the network; you can sort for plans accepted by your doctor after getting quotes at eHealth.com
• You want some freedom to direct your own health care but don't mind working within a list of preferred providers

HMO

HMO stands for "Health Maintenance Organization." HMO plans offer a wide range of health care services through a network of providers that contract with the HMO, or who agree to provide services to members. Members of HMO plans will typically need to select a primary care physician ("PCP") to provide most of their health care and refer them on to HMO specialists as needed. Health care services obtained outside of the HMO are typically not covered, except in an emergency.

An HMO plan may be right for you if:

• You're willing to play by the rules and coordinate your care through a primary care physician
• You want to save every dollar possible; many HMO plans typically have lower monthly premiums than comparable PPO plans

EPO

EPO stands for "Exclusive Provider Organization." EPO plans are similar to PPO plans but may be somewhat more restrictive when it comes to your network of doctors and hospitals. EPO plans typically do not provide you with coverage outside your network, except in emergencies. EPO plans are becoming more popular with health insurance shoppers, and health insurance companies are offering more of them as well. You're generally not required to select a single primary care doctor with an EPO plan.

An EPO plan may be right for you if:

• You don't mind getting your care through a specific network of doctors and medical providers
• You prefer not to coordinate your medical care through a primary care doctor

HSA-eligible Plans

These are usually PPO plans with higher deductibles, designed especially for use with Health Savings Accounts ("HSAs"). Similar to a flexible spending account (FSA) or 401(k), an HSA is a special bank account that allows participants to save money on a pre-tax or tax-deductible basis to be used specifically for medical expenses in the future. Unlike FSAs, the money in an HSA rolls over every year and can also earn interest. By pairing a qualifying high-deductible health plan with an HSA, participants can save money on health care and earn a tax write-off. Find more information about HSAs online at www.ehealthinsurance.com/hsa.

An HSA-eligible plan may be right for you if:

• You would like to pay for health care expenses with pre-tax dollars (up to an annual limit)
• You're relatively young and healthy and don't often visit the doctor
• You prefer a cheaper monthly premium even if it means having a higher deductible in case of unexpected injury or illness