Building a sustainable business takes a lot of hard work. In today’s competitive labor marketplace, employers have to offer certain benefits to potential employees to join their organizations. A big incentive that most employees commonly expect is health insurance. Getting the right insurance plan may seem difficult to some
The purpose of this guide is to provide a general overview of Ohio small business health insurance. The guide reviews small business health insurance options for Ohio small businesses.
Building a successful business is hard work. Finding affordable small business health insurance doesn’t have to be. All small businesses face special challenges when it comes to finding and getting health insurance coverage. Luckily, recent health care reform legislation provides small businesses with special opportunities to secure affordable health insurance.
Ohio Core Small Business Health Insurance Options
When evaluating your small business health insurance options in Ohio, you should immediately compare the costs and benefits of the following three options:
- Offering Traditional Small Business Health Insurance Coverage
- Offering a Defined Contribution Health Plan that Reimburses Employees for Individual Health Insurance Coverage, and
- Offering Nothing
Ohio Small Business Health Insurance Overview
There are two primary categories of health insurance for small businesses to choose from:
- Individual health insurance,
- Group health insurance.
Individual Health Insurance
Individual health insurance plans are health insurance plans purchased by individuals to cover themselves or their families. Anyone can apply for individual health insurance. Small business owners who can’t offer group coverage due minimum contribution (or minimum participation) requirements typically purchase individual and family plans for themselves and their families. In 2014, insurance companies will no longer be able to decline individuals for individual health insurance based on a pre-existing medical condition. Also, starting in 2014, there are new special tax incentives available to businesses and employees when employees purchase individual health insurance. In some cases, self-employed persons who purchase their own health insurance may be able to deduct the cost of their monthly premiums. When small businesses decide on the individual health insurance route, they often create a “Pure” Defined Contribution Health Plan to reimburse employees tax-free for individual premiums.
Group Health Insurance
Group health insurance plans are a form of 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 qualify for group health insurance plans.
Four Types of Ohio Small Business Health Insurance Plans
Whether you’re looking at individual health insurance or group health insurance, there are several different types of health plans available. The four you should absolutely know are:.
- PPO Health Insurance Plans,
- HMO Health Insurance Plans,
- HSA-Qualified Health Insurance Plans, and
- Indemnity Health Insurance Plans.
The plan type that is best for you and your employees depends on what you and your employees want, and how much you are willing to spend. Here’s a brief review of the four popular types of health insurance plans:
PPO Health Insurance Plans
PPO or “Preferred Provider Organization” plans are the most common. Employees covered under a PPO plan 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.
HMO Health Insurance Plans
HMO stands for “Health Maintenance Organization.” HMO plans offer a wide range of health care services through a network of providers that contract exclusively with the HMO, or who agree to provide services to members. Employees participating in 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.
HSA-Qualified Health Insurance Plans
HSA-qualified plans are typically PPO plans designed specifically for use with Health Savings Accounts (HSAs). An HSA is a special bank account that allows participants to save money – pre-tax – to be used specifically for medical expenses in the future. Section 105 Healthcare Reimbursement Plans (HRPs) are often used in place of HSAs due to their advantages for employers.
Indemnity Health Insurance Plans
Indemnity plans allow members to direct their own health care and generally visit any doctor or hospital. The insurance company then pays a set portion of the total charges. Employees may be required to pay for some services up front and then apply to the insurance company for reimbursement.