You’ve started a small business, so that means you’d be better off switching to group health insurance, right? Well, maybe it makes sense for you, and maybe it doesn’t. Here’s a few reasons why you may be better off hanging on to your individual/family coverage.
1. You have a very small company and you don’t plan on growing much bigger.
If you have a small company with only a few employees, it is probably less expensive for each employee to get his or her own individual policy. Some businesses even offer medical insurance stipends to their employees and it works out well for everybody. If an employee leaves the company, they don’t have to worry about getting on COBRA. They simply keep the coverage they have. And unlike COBRA, which only lasts 18 months, they can keep their policy as long as they like. The main drawback is that if you have an employee that gets denied due to pre-existing conditions, they may be stuck without coverage.
2. You can’t afford it.
When purchasing a group health insurance policy, you are required by law to pay at least 50% of the monthly premium for each employee. The average employee’s premium costs anywhere from about $150 to $300 a month. So if you have 4 employees, you can estimate that you’ll be paying at least $300 a month ($75 x 4 employees).
3. Choice of doctors and hospitals
When shopping for an individual plan, you can pick the plan you want that will include the doctors and other providers you’d want to use. However, if you purchase a group plan, maybe you will be happy with the doctor selections, but what if even just one of your employees is not? Are you going to select your group plan based upon what your employees decide, or on what you think is best?
4. What if the new business fails?
If your business were to go under, you’d lose your health insurance benefits. It’s bad enough to see your business fail, but do you need the added aggravation of losing your health insurance at the same time? An individual policy is not tied in to your business, and will stay in force as long as you continue to make the premium payment.
5. Paying for benefits you don’t need
Employer group plans have state mandated benefits. When you purchase a group plan, you may be forced to pay for benefits that no one will ever use, such as maternity benefits or very rich mental health benefits. When the group is very small, this can have an impact on your group’s rates. With an individual plan, you can get what you want and not have to pay for medical services that you’ll never use.
Those are a few reasons why a group health plan may not be right for you. There are also many reasons why a group plan may be your best bet. For example, if you and/or your employees are unable to qualify for individual coverage due to pre-existing conditions, group health insurance is probably the way to go. In addition, group plans currently offer the best available maternity coverage.
If you’d like to receive an individual/family quote for health insurance, click here. If you’d like more information about group health coverage for your business, click here. If you have questions, feel free to shoot us an email or give us a call at 1-800-600-9663.
