Small Business Benefit Offerings Compete With the Big Boys

Dylan Murray

Small Business Benefit Offerings Compete With the Big Boys

Small business benefit offerings are in-line with all employers, according to a survey from United Benefit Advisors. While small businesses still carry the inaccurate reputation of offering health insurance with higher costs and fewer benefits, statistics prove otherwise. The largest employers still appear to carry significant negotiating power, but those negotiations aren’t providing the employers with significantly better benefit offerings.

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Plan Type

PPOs are often the most desired kind of health plan. The report noted that more than 49 percent of the smallest businesses — those with fewer than 26 employees — are offering PPO health plans, while 44.9 percent of the next category — those with 26 to 49 employees — do the same. When you look at all employers offering plans, only 48 percent offer PPOs. That makes small businesses second only to the largest employers, 60 percent of which offer PPO plans. PPO plans are generally the most expensive type of health insurance because they offer the greatest freedom in choosing a doctor and the least supervision by a primary care physician for care approval.

Annual Cost

In an impressive showing, small businesses seem to have remarkable rates for the annual cost of health plans per employee. For example, the report noted that the annual cost for health insurance coverage by a small business is $10,043 (1-24 employees) and $9,431 (25-49 employees). This is significantly less than the cost for employers with more than 500 employees, which is $10,777 per person annually.

Out-of-Pocket Cost

So if the annual costs are less expensive, how are the out-of-pocket costs for the patients? Generally, small business benefit offerings are in-line with the cost of plans offered by all employers. For example, co-pays are standard across the board with everyone paying $25 for a primary care visit, the report explained. The big employers, however, do seem to offer a slight savings when it comes to patient costs. When visiting a urgent care center, patients employed by a small business are paying $50 per visit, while their counterparts at large employers are paying $40 for the same visit.

According to Inc. Magazine, you have three ways to shop for a competitive small business health plan. To find a plan with the best small business benefit offerings, you can use the Small Business Health Options Program (SHOP), which is a part of the Affordable Care Act; go through a Private Health Exchange; or purchase your plan from an insurance carrier (typicalls via a broker.)

Picking a plan isn’t easy and takes time, but it’ll be worth it once you have a competitive health plan as part of a benefit package to retain your most valuable employees.

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