Five factors impact small business owners’ health insurance cost: the size of your business, the type of coverage you select, the age of your employees, business locations, and claims history. Let’s see how each can impact your cost.
Size of your business: Businesses with more employees pay lower premiums than those with fewer employees. The financial risk is smaller as the cost of claims can be absorbed by more employees.
Type of insurance: The coverage you select will determine how much you pay. More comprehensive plans that cover preventive care and prescription drugs tend to drive insurance costs up because those plans cost more to provide.
Age of Employees: The age of your employees can affect your monthly premium. Older employees or those with more chronic conditions may be more expensive to insure than younger, healthier employees.
Location of your business: Major cities tend to have higher costs.
Your business claims history: Small businesses with high claims may have to pay higher premiums. A business that files higher claims will cost the insurance company more money.
We're here to help you understand health care options that meet employees’ needs and your budget. Learn more about available plan options or get a quote.
One factor you can control is how much you contribute to the monthly premiums. As a small business owner in Texas, you must contribute 50% or more to pay your employees' monthly premiums, or you can pay for it in full. One of the advantages of paying the full amount is that you have a better opportunity to retain talent and recruit new employees.
As part of the Affordable Care Act, small businesses can apply for a tax credit. There are other means of financial relief when offering employees health insurance, including tax deductions. Expenses that may qualify include monthly premiums, contributions to an HSA (Health Savings Account), and tax-advantaged dollars.
According to Healthcare.gov , qualifications for a tax credit include:
Healthcare.gov also offers a tax credit estimator to see if your business is eligible for a tax credit. Contact a tax professional to give you more details on the tax advantages you may qualify for by offering your employees health insurance.
There are added non-monetary benefits to offering health insurance. Increased well-being of individuals comes with confidence in their plan's ability to cover expenses. Employees are more likely to schedule routine check-ups, pursue specialist appointments, and take advantage of the health care benefits, which may reduce sick days. When you offer health insurance, the overall well-being of the workplace is likely to improve.