Small Business Health Insurance
Adequate health insurance and being able to pay for it is one of the most nagging concerns for those who leave corporate America

Sometimes the paperwork alone for small business health insurance is enough to give owners major headaches. In some states, carriers such as Blue Cross and Blue Shield as well as commercial insurers are asking companies to provide payroll and tax reports to confirm the number of employees in their plan. Reform legislation passed in 2003 permits the carriers to request that information.


What would happen to your business if you were paralyzed for one year? Severe disabilities have increased 400 percent over the past 25 years from the age of 17 to 44, according to the Disability Management Sourcebook. Think again if you believe the government will look after you. Social security alone can have lengthy waiting periods. The key decision you’ll need to make is how much disability insurance you need and can afford.
 
Having adequate health insurance and being able to pay for it is one of the most nagging concerns for those who leave corporate America to run their own businesses. Many small businesses have dropped health coverage or reduced it in the past three years owing to increasing rates. If you’re starting a business, the Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that obliges corporations to permit departing personnel to buy health insurance through the company’s group plan. There are also companies that take several small businesses and generate a large group out of the aggregate.


You will most likely qualify for group health insurance if your company employs between 2 and 50 people. The great thing about a group health insurance plan is that it works both for the group and for the individual. Health care sadly is never inexpensive, but obtaining group health insurance will make individual policies much easier on your bottom line.
 
Selecting a group health insurance plan for your small business should not be an impulsive decision. You should know the difference between HMO and PPO plans: the two types of policy most readily available to small businesses. An HMO is usually less expensive, but will limit your employees’ choice of doctors. On the other hand, a PPO will offer them more freedom of choice.
 
Finding your way through the health-insurance web is a little easier if you know the lingo:
  • Blue Cross and Blue Shield Organization – the national trade organization that links 38 independent regional health insurance companies in the United States.
  • Health Maintenance Organization (HMO) – a plan that covers visits to doctors in a network defined by the HMO.
  • Preferred Provider Organization (PPO) – a plan that covers visits to doctors in a network. A smaller fraction of your expenses are covered if you go to a doctor outside the network.
 
Two of the most distinct tendencies in US business in the past 10 years have been the increase in entrepreneurial activity and the decline in the accessibility of reasonably priced healthcare coverage. You are going to discover that from a small employer’s standpoint, offering health insurance can be a huge expense, representing a frighteningly large fraction of your bottom line. On the other hand, of course, it’s a major moral builder and hiring incentive to key employees to know that you care enough to provide decent health care benefits.


Take Your Insurance Company’s Temperature
 
One of the things you must check out when shopping for any kind of insurance is the insurer’s financial strength rating -- the company’s ability and willingness to pay on claims submitted. A badly run company with insufficient cash flow might be slow when it comes to paying claims. Make sure you investigate the company before making any purchases. If you’re not sure about the company’s reliability check them out at www.insure.com They provide free access to Standard and Poor’s insurance ratings. There’s no reason why you should ever put your money with a company whose rating is lower than AA.
 
To get consumer feedback on major insurance companies, check out http://www.100insurers.com/ There you’ll find out all kinds of things about the companies you’re considering like how many complaints they’ve gotten, pending litigation, etc. If they are getting a thrashing here, consider another company. It sucks to pay out monthly for coverage and then have to fight tooth and nail for compensation when you make a claim.