There are all kinds of claims going around about small business health insurance, and many of them can leave employees misinformed about their benefits or their rights. While some of these stipulations are true, there are a few that are myths. We'll clear things up a bit below.
Myth #1: Insurance Companies are Only After the Money
This is the most popular myth about all insurance companies, including those offering health insurance for small businesses. This couldn't be more false. There is no shortage of insurance companies out there offering benefits to small business that were developed to protect the assets of a small business and their owner. As an entrepreneur, you should think about your deductible and monthly premiums carefully. It is proven that plans with lower deductibles offer more foreseeable costs. Whatever you choose, know that your insurer has the protection of your business as its top priority.
Myth #2: Employers MUST Supply Equal Benefits to ALL Employees
Some states and carriers require employers to contribute at least 50 percent of the cost of employee-only coverage. This is a strategy to attract and retain good employees. Employees can in fact receive different health insurance benefits for a variety of reasons. For example, one company may employ workers that have very different work-related risks. Other companies of a more competitive nature may decide benefits based on an employee's length of service.
Myth #3: Employers are Required to Pay AT LEAST 70% of Health Insurance Premiums
Although the Affordable Care Act does not require employers to contribute a set amount to employee-only coverage, some insurance carriers and states require employers to pay at least 50 percent of the premium. Some employers can choose to cover more if they want to keep a certain employee or group of employees that are good for business.
Myth #4: Employers are Required to Pay for Single and Family Coverage Equally
Although many employers provide the same level of coverage for single and family employees, they often contribute less than they should. For small firms, the employer contribution varies depending on the size of the company. An employer's contribution to a family's health insurance plan does not need to be the same as their contribution to a single employee. In fact, it often is not.
Myth #5: Employers Can Extend Health Insurance to Certain Employees
This myth is often not a myth at all and holds a lot of truth. There are only a few things that would change this: If you offer coverage to one full-time employee, then all full-time employees must be covered. Even if you only offer coverage to part-time workers, then all part-time employees must also be covered.
Myth #6: A Business Can Offer Group Health Insurance Plans and Have Its Employees Pay the Entire Cost of the Plan
Many employers see this as a way to help their employees. Some employers believe that offering a group plan is an example of their employer's generosity. They believe that employees pay the bill because they think that they are saving them money. However, this often creates situations where employees can find more competitive insurance rates by searching elsewhere. The only way for an employer to truly save employees money on health insurance is to offer a contribution.
The points provided above should help employees understand their rights, and what to believe when dealing with small business insurance. This information also opens up more questions to ask when that time comes so you can fully understand what you are capable of doing, and what you are not.