Health Insurance for Small Business
- www.health-insurance-for small-business.net
In an ideal world, all employers would provide 100% health insurance for all their employees. Ask your father or grandfather, and they may recount such a world in their work lives, but such coverage in today’s world is certainly by far the exception and not the rule.
What happened, and why is this generous coverage not as widespread as it was a generation or two ago?
Industry experts will offer many explanations but most of them boil down to one thing: cost. Miraculous medical advances and technology exploded on the scene over the past 25 years, but at a significant cost. Talk to anyone who’s recently been in a hospital for a few days about the cost of that stay; you may be shocked.
Of course insurance companies provide coverage for almost all contingencies. But remember these companies are in business to make a profit, like all businesses. You will then understand that they must charge premiums attendant with the cost of the medical procedures for which they may need to reimburse their policyolders.
So, what’s the answer to the health insurance needs of small businesses? One solution that many small business owners resort to is to pool their insurance needs and form a larger buying entity. In this way, they can bring to force the same numbers that large companies do and demand equivalent premiums.
How does this work? In many states, insurance regulations severely restrict and monitor how business owners may pool their employees and what benefits and premiums they may levy. Often, these state regulations prohibit employers from pooling their employees’ insurance coverage with other businesses in other states. In effect, state insurance regulators safeguard their jurisdiction by prohibiting employers from joining with business owners in other states.
Some small business owners feel these regulations limit their freedom, increase their costs, and reduce the number of employees who can ultimately be insured. The recent major health insurance legislation passed in Washington addressed this issue, granting small business owners greater freedom to pool their risks. However, challenges to this legislation leave business owners unsure at this time of what rights and restrictions they face.
As a result, health insurance for small business owners remains both costly and filled with questions. In an era when small business owners face increasing competition from all sides, most owners seek creative ways to provide their employees with some sense of protection. As it stands today, that protection is costly, and those costs seem likely to rise rather than reduce in the years ahead.
One risky route some business owners take to provide health insurance for small business employees is through self insurance. As the name implies, business owners decide to assume some or all of the financial burdens of health care for its employees, paying benefits out of its profits. Obviously, a company needs to have reasonable expectations of sufficient profits for this type of insurance to work.
Without a doubt, health insurance for small business owners will continue to be a hot issue in state legislatures and with insurance companies for a long time to come.