Have you been thinking about offering health insurance to your employees?
If so then you know that it is a challenge because of the high cost of group health insurance for small business.
So what do you do? Many small business owners have found success by working with a small business health insurance broker for help in achieving the goal of providing health insurance to your employees.
There are a few things you should know before you buy group health insurance plans to ensure you don’t disappoint your employees or waste money.
This post will tell you what you need to know to select a small business health insurance plan that your business can afford and that helps your company attract and retain quality employees.
FAQ - Small business health insurance brokers
To help you prepare for researching group health plans and working with a small business health insurance broker, below are short answers to the 4 most common questions we hear from Arizona business owners.
How many employees do you have to have to offer group health insurance?
First of all, small businesses of under 50 employees do not have to offer health insurance to employees. If your business has over 50 employees then you may need to offer health insurance as part of the Employer Shared Responsibility Provisions which is part of the Affordable Care Act (ACA) aka Obamacare.
Group health insurance plans are available for small business with between 2 and 50 full-time employees. Full-time is typically defined as 30 hours or more a week.
How much does health insurance cost for a small business per employee?
This is usually the first question we get: How much will group health insurance cost my company? The short answer is there is no ballpark number for the expense of offering group health insurance.
The monthly charge of the group health insurance premiums can be fully paid by the employer, or the costs can be shared between the employer and employees.
The cost of a small business group health insurance plan depends on a number of factors. Here are a few of the easier to understand variables:
- The insurance carrier
- The providers in the network
- The type of plan, for example, HMO, PPO, HSA-qualified, etc.
- The options in the plan
- The location of your business
- The demographics of your employees
The best way to get the ballpark price is to speak with a small business health insurance broker. Most Arizona health insurance brokers, including us, will provide a free consultation and a free quote for a variety of small business health insurance plans.
The good news is that Arizona had one of the lowest average insurance costs in 2016 with the per person cost of $170.
Do small employers have to report health insurance on w2 for 2018?
Yes, small employers with between 2-50 employees have to report the cost of health insurance coverage under an employer-sponsored group health plan on an employee’s Form W-2, Wage and Tax Statement, in Box 12, using Code DD.
The amount reported should include the portion paid by the employer and the portion paid by the employee.
The employer is not required to issue a Form W-2 solely to report the value of the health care coverage for retirees or other employees or former employees to whom the employer would not otherwise provide a Form W-2.
You can read more here: Form W-2 Reporting of Employer-Sponsored Health Coverage
Do I have to offer insurance to all employees?
No, you don’t have to offer the group health insurance benefit to every employee.
IRS rules state that employers are free to offer health insurance to some groups of employees and not others. However, the basis of the decision on who gets the insurance must not be made on a discriminatory basis.
Examples of discrimination would be providing health insurance to men but not women, to Caucasians but not African American employees or to employees without disabilities but not to employees with disabilities.
Next Step - Speak to a small business health insurance broker
Now you know the answers to the most common questions asked to small business health insurance brokers.
Well, at least the questions we hear the most in our Scottsdale AZ offices.
Now you ready to speak with a local Scottsdale group health insurance broker and get actual quotes for real health insurance plans that you can offer your Arizona employees.
Call us to schedule your free consultation.