I’m trying to figure out how to offer health insurance for my small business. We have 3 employees and 2 contractors, and I want to provide health coverage starting in January. We’re located near Cleveland, Ohio. I got quotes from my local chamber of commerce for around $900 per employee (two families and three singles), which seems pretty high, especially with deductibles in the $6k-$9k range. I also looked into group insurance with Blue Cross, but they said the group size was too small, and the price was even higher. Any advice or ideas would be appreciated.
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Health insurance is crazy expensive, and it’s a big problem in the US. For your contractors, they’re not technically employees, so you can’t offer them insurance. That could be something to look into before moving forward.
@Colby
If the person who posted this treats the contractors like employees, they might want to resolve that classification first before worrying about offering them insurance.
Have your employees shop for insurance on the marketplace, and contribute tax-free towards their premiums. Look into Qualified Small Employer Health Reimbursement Arrangements (QSEHRA) for a flexible option. You could also consider using a PEO (Professional Employer Organization) to help reduce premiums, but be aware of admin fees.
@Dell
Yup, HRAs are becoming really popular for small businesses. I set this up for my 6 employees earlier this year. We use Base.com for managing it, and it’s been smooth so far. Employees can use the funds for anything health-related, including dental, vision, or even out-of-pocket costs like glasses or copays. It’s a great way to give your employees flexibility, and I don’t have to manage their medical stuff. It’s a huge relief. They can even use the funds for non-prescription health stuff like allergy meds.
@Zora
How’s Base.com working out for you? We’ve been using Take Command for our HRA, and while employees have had some complaints about onboarding, it’s been a good tool overall.
Luca said:
@Zora
How’s Base.com working out for you? We’ve been using Take Command for our HRA, and while employees have had some complaints about onboarding, it’s been a good tool overall.
I can’t compare it to anything else, but it’s been great for us so far. I haven’t had any complaints from my team.
@Dell
What’s the management like for QSEHRA? Can a small business handle it directly, or do most people hire a third party to manage it?
Tobi said:
@Dell
What’s the management like for QSEHRA? Can a small business handle it directly, or do most people hire a third party to manage it?
It operates like an accountable plan, but for medical expenses. Depending on the size of your business, you could likely manage it yourself. I’d recommend talking to an accountant for advice on setting it up and keeping track of all expenses.
Look into small business health insurance pools. They group small businesses together for better rates. This can help reduce your costs and provide more value by covering more people.
Ben said:
Look into small business health insurance pools. They group small businesses together for better rates. This can help reduce your costs and provide more value by covering more people.
Yes, many groups, including Chambers of Commerce, offer insurance for small businesses.
@Oak
We looked into that option, but it was $1500 a month for families of three and $800 for individuals. The plans weren’t great either.
That’s pretty crazy. Me and my wife were paying $1500 a month for our family of three, and we couldn’t get subsidies. But we found a group plan for $950 per employee, and it worked out better for us. We got private insurance 4 months ago with United Healthcare PPO. It costs $730 per month with no deductible, which has been great for us. We pay about $400 per person for our employees, with dental and vision included. The only catch is you have to be approved if you have no major health issues, but it’s much cheaper than marketplace plans. If you’re interested, I can share the agent’s contact info.
Have you considered looking into the Obamacare plans? They might offer some more affordable options.
I’m not sure how you offer benefits to 1099 contractors, but you might want to talk to a tax advisor. Any subsidy you offer them could be seen as income. If your total cost is $4500 a month for 5 people (including 2 families), it’s not a terrible deal. Family coverage can easily cost $1500 a month on the marketplace, so your rates sound pretty competitive.
Here are a few options to explore for small business health insurance:
- QSEHRA or ICHRA: Let employees buy their own insurance and reimburse them tax-free.
- PEO: Partner with a PEO for group rates.
- HDHP + HSA: Choose a high-deductible health plan paired with an HSA to lower premiums.
- Marketplace or SHOP: Check Ohio’s ACA marketplace or small business options for tax credits.
- Healthcare Sharing Plans: A cheaper alternative, though they come with limitations.
- Broker: Use an independent broker to find more affordable options.