Small Business Health Insurance?

June 4, 2006 5:28 AM

Health insurance targeted toward small business owners and their employees?

My wife and I own what used to be a home based business but what is now a small busines with seven full-time employees (and about a dozen part-time employees). Our full-time employees have been, rightfully and understandably, asking us to provide health insurance.

So, I first turned to AskMe and read every thread tagged with health and insurance. I also googled various incarnations of "small business health insurance policy," but really found very little. I did submit an online interest form for United Healthcare.

My questions are these... do you know of any policies/carriers that I should contact? Is there any type of insurance plan specifically targeted for small business owners to offer their (few) full-time employees? What companies offer the most reasonable coverage for the most reasonable premiums? If you have been in a similar situation, do you have any advice for us as we embark on this process?

If it helps, the business is located in Milwaukee, Wisconsin. My wife and I are covered by a plan at a university where I teach, so this would just be for our employees.

posted by richardhay to Health & Fitness (10 answers total)

there are companies that take many small businesses like yours and create a large group out of the agregate.
Not only for health insurance but for all HR admin issues. Payroll, benefits, insurance, 401K plans etc.
In short they give smallbiz all the bennies of a giant corporation. They charge a fee for their services of course, buts often reasonable when offset by the time you no longer need to devote to such matters.
posted by Fupped Duck at 5:48 AM on June 4, 2006

It's noble of you to want to do this, but you are going to find out (if you haven't already) that from a small employer's perspective, providing health insurance can easily be a massive expense and is likely to represent a disturbingly large fraction of your bottom line. The employer-provided insurance model in the US is grievously broken, but it's what we're stuck with.

So.

This set of short articles from Entrepreneur magazine may be of some help to you, at least to give you a more informed set of worries.

Advice:

-- Most small businesses are experiencing this problem; use the resources available to you locally to find out how others are handling it. I would check with the Chamber of Commerce, the local office of the state insurance department...

-- Especially with health insurance, "cheapest" is most definitely not best. The cheapest provider that you can find is not a good value if they are constantly denying or delaying payment on valid claims; research your providers and plans very carefully.

-- Trends seem to be moving in this direction: employers are paying more for coverage, employees are paying a higher fraction of their insurance costs, and deductibles are rising. In other words, everyone is paying more and getting less for it.

-- Look into creative and nontraditional alternatives that provide the same net effect as traditional health insurance. One potentially workable plan is a high-deductible "catastrophic" major-medical policy combined with a Health Savings Account (HSA.)

-- Anecdotally (take with approximately ten pounds of salt), when I was looking into this several yeas ago, it seemed that BlueCross/BlueShield had somewhat-affordable plans for entrepreneurs and small businesses. (Disclaimers: This was a while back, and this was in North Carolina; from what I've heard, rates have skyrocketed in recent years.)
posted by enrevanche at 5:49 AM on June 4, 2006

(Sorry, I hit send prematurely)


Here's an example of a Professionnal Employee Organization (PEO). (There are many companies offering this now):

http://www.innovativeemployeesolutions.com/hrbo/hr_admin.html

Here's an article on this fast growing industry:

http://www.entrepreneur.com/article/0,4621,305528,00.html

HEre is a buyers guide for these services:
http://www.buyerzone.com/personnel/peo/buyers_guide1.html
posted by Fupped Duck at 6:01 AM on June 4, 2006

Check with your local Chamber of Commerce. Most allow you to buy health insurance through their group which gives a good discount.
posted by Jandasmo at 6:35 AM on June 4, 2006

My husband works in a really small office and gets insurance through a Blue Cross/Blue Shield "Entrepeneur" program. He just started there, so I'm not sure of all the details, but I think that they aggregate a lot of small businesses into one group. The premiums are fantastic -- much lower than at his last job, where he had Blue Cross/Blue Shield.
posted by sugarfish at 7:16 AM on June 4, 2006

Here's what we did. First, we called the insurance broker that sold our business it's assorted business insurance policies and asked what they could do for us. They found us an overpriced blue cross program. Overpriced as in I could have gotten a better deal arranging the proper number of individual plans through ehealthinsurance.com

Then I called our local Allstate guy -- yes the one with whom we have our house and cars insured. He of course doesn't sell health insurance, but being a small businessman himself, he needs health insurance and has a buddy. I called buddy. Buddy came to our office with a selection of about 20 plans ranging from cheap to pricey, ppo to hmo to hsa. We found something that worked for us. Unfortunately we haven't been in business long enough to get a good rate on dental, but he says he can help us with that next year.

So the moral of the story is that if you have a local insurance dude, call him; they've all got buddies who want to write policies and make commissions.
posted by ilsa at 3:09 PM on June 4, 2006

My dad owns his own business with just him and 3 employees and they use unicare.
I think it's pricey, but it's really great coverage.
posted by oronico at 9:21 PM on June 4, 2006

Response by poster: All: Thank you so much for your help! I am pursuing each and every option that each of you presented and I'll be sure to check back in with updates. Thanks again!
posted by richardhay at 7:48 AM on June 5, 2006

Small Business Health Insurance Network provides health, life, dental and ancillary quotes to small businesses nationwide. Blue Cross Blue Shield, Aetna, Assurant, Humana, Pacificare, Kaiser Permanente, United Healthcare and many more. Site includes benefit and small business group health insurance buyers guide.

posted by sbhi.net at 8:02 PM on May 28, 2007

Small Business Health Insurance Network
http://www.sbhi.net
posted by sbhi.net at 8:03 PM on May 28, 2007