5 Mistakes Small Businesses Make When Choosing Health Insurance

When it comes to choosing a health insurance plan as a small business owner, it’s very easy to get overwhelmed and make a mistake. If you are a small business owner, here are five mistakes you can avoid.

1. Make sure you understand the law, eligibility requirements or tax provisions for your state.

Health care is a highly regulated industry. That's why there are licensed agents and brokers dedicated to staying up to date on the latest federal and state requirements. A credit amount is passed on to the small business in the form of reduced premiums of $1,000 per year for single coverage and $3,000 per year for family coverage. If you are shopping for health plans, not doing your research can result in a costly mistake. As a small business, you should also look at the Affordable Care Act tax provision for Small Employers to learn about what you're responsible for and see if you can take advantage of a few benefits.

2. Ask your employees what matters to them in terms of benefits.

The COVID-19 pandemic has really elevated employee expectations around benefits. So it's extra important to research what your employees want or need in terms of insurance. If you don't, you may end up overspending on benefits that go unused. Or, even worse, you may not spend enough on what your employees actually need. Everyone's health care needs are different. Take the time to find out what your employees value and offer them a few options or plan tiers. A single plan option is likely not to fit everyone on your team.

3. Purchasing healthcare insurance for your small business without an experienced broker.

The health care insurance world is complicated and if you're shopping without a licensed, experienced broker, it can get overwhelming very easily. Teaming up with a licensed broker can give you peace of mind. Brokers are well-versed in regulations and jargon and can break down the whole process for you. But of course, not all brokers are right for you, so do your research before settling on a broker as well.

4. Forgetting to ask your broker about tax-friendly account options like HSAs.

A Health Savings Account (HSA) is a long-term, tax-advantaged account an employee sets up to pay for their health care expenses. HSAs can only be used with specific HSA-compatible insurance plans that usually have high annual deductibles and lower monthly premiums. These types of plans can help you save on premium contributions while still providing health coverage for your employees.

5. Staying with a health insurance carrier or plan that doesn’t work for your employees or your business.

One of the differences between individual insurance and small group insurance is that as a small business owner, you can switch plans at any time! If you choose a plan that's not working out for you or your employees, you don't have to stick with it until the plan year ends or an open enrollment period. Just make sure you have the new provider lined up so your employees don't have to worry about breaks in their coverage while you're making the switch.

Cigna + Oscar offers care that cares about small businesses and their employees including 24/7 virtual urgent care via the Oscar app, mental health and behavioral coaching. Visit our website to learn how we can help.