Running a small business is challenging enough without the confusion health insurance can cause. Too often the resulting angst is driven by common misconceptions that experienced advisers can help dispel.
Without a doubt, health insurance continues to be one of the most important and valued benefits that employers can offer to their workers. After salary, it is consistently the top factor for attracting and retaining talent whether a company has two employees or 2,000.
That said, navigating the employer-sponsored benefit landscape can be especially daunting for small businesses. Cost and compliance considerations alone can seem impenetrable.
But these perceptions are frequently rooted in fallacy rather than fact, and brokers can help shed a light on this important topic.
For example, here are three frequent misperceptions amongst small businesses:
1) It’s too expensive. While there are certainly costs involved with offering health insurance, providing coverage options does not mean a company has to break the proverbial bank. As with any operational expense, the first order of business is to establish a budget.
Brokers can then work with their clients using tools such as defined contribution, where a business provides each employee with a fixed dollar amount they then choose how to spend. As a result, workers can select from a set of health plan choices and pay the difference not covered by the employer’s contribution. So, if they want to spend more for a more benefits-rich plan, they can.
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In turn, a company is able to lock-in their costs. This provides budget controls that can be planned and managed monthly and annually.
2) It won’t meet everyone’s needs. Small businesses can find and offer health plan solutions that meet the diverse needs of their workforce, and brokers can help point the way.
Well-designed healthcare exchanges, for instance, can be a great option for offering a wide selection of health insurance plans that ensure choice and access to care for employees who most likely need very different coverage. A 22-year-old just starting her first job will likely want a different plan that a 59-year-old sales manager with a spouse, three children and plans to retire in the near future. One may want a PPO while someone else wants an HMO. Still another may want an HSA-compatible plan.
The beauty here is that a good exchange can offer multiple health insurance plans within a single package. So, regardless of which options employees select, businesses get one monthly itemized bill and can manage overall benefit offerings through a single website and online portal, all with the support and guidance from their broker.
3) It’s too complicated. The industry might be complex, but offering health insurance does not have to be overly difficult for a small business because there are resources and experts available to shoulder the details.
For example, there are many products and platforms that simplify administration by consolidating information and processes into easy-to-use automated systems. In fact, many carriers and providers have already moved to implement some form of online enrollment. This helps streamline processing and speeds up underwriting. But it also provides one point of entry from where employers and employees can then move on to review and compare options, choose and enroll in a plan and manage their benefits throughout the year.
Brokers can leverage these new technologies and online capabilities as well. This enables them to serve as a small business’ single point of contact and go-to expert for solving problems or addressing needs. These can range from vetting and recommending coverage options to guiding workers through benefit claims processes to assisting with regulatory mandates, and much more.
While healthcare can be mystifying, small businesses need not fall prey to misinformation and myths. Brokers can guide them to options that can be affordable, offer a variety of choices and are easy to manage. The solutions are out there.