Health Insurance for Your Small Business

In the insurance world, the terms small group and small business are used interchangeably.  So when we refer to small groups, we also mean to include small businesses and small companies. Typically a small group has less than 50 employees.

Companies looking for creative solutions to high-cost health insurance plans should consider the Health Savings Account (HSA). Small businesses can offer HSA-compatible insurance plans to their employees called High Deductible Health Plans (HDHPs).  Because these HDHPs have high deductibles, they typically cost less per month than traditional plans.  Employees who select them can set up tax-free accounts called HSAs to help pay for their deductible and other qualified medical expenses. The account is owned by the employee and the employee can “take it with them” even if they no longer work for the company.

While the employee may own the account, the employer can also contribute to the HSA as a benefit to that employee. Often times companies agree to contribute the difference between the cost of the HSA and the more expensive traditional plan. With this solution, the employee feels valued with an extra benefit of a partially funded savings account, while the employers feel they can offer an extra benefit at no real additional cost. Under the right conditions, the small group HSA alternative can be a win-win solution for both employee and employer.