Small business health insurance plans are not always easy for Colorado companies to afford or offer to employees. However, these same companies also understand that providing some coverage is essential to attract the highest quality of applicants.
According to an organization called the Colorado Health Initiative, the state passed legislation in the spring of 2019 to provide additional opportunities to small businesses.
Basic Health Insurance Choices for Small Colorado Business Owners
Offering employees traditional health insurance coverage, including health insurance for dependents, remains the most popular solution for providing small business health insurance plans. However, more companies have started exploring the possibility of reimbursing employees for a portion of health insurance coverage they purchase on their own.
Local businesses explore employee reimbursement offers because the cost of providing a typical health medical plan in Colorado continues to rise each year, reaching the point of unaffordability for some employers. Employers also need to decide on the type of coverage to offer if they opt to provide traditional individual health insurance.
What Small Business Employers Should Understand About Individual Health Insurance
An individual health insurance plan is one that a person takes out to cover himself or herself, and sometimes family members, without going through an employer. Any person over age 18 can apply for their own individual health insurance policy.
As of 2014, insurers can no longer deny coverage to people with pre-existing medical conditions due to health care reform during the Obama administration.
To encourage the adoption of Obamacare, the federal government began offering incentives to employers that partially reimbursed employees for purchasing their health insurance.
Colorado employers often call us for help finding small business health insurance plans. Small companies that choose individual health insurance reimbursement appreciate these plans due to better affordability and no need to meet minimum contribution or number of participants set by insurance companies. The 2014 health care reform also allowed self-employed individuals to deduct a portion of health insurance premiums they pay themselves.
What is Group Health Insurance?
The most common medical plan options for Colorado employers that choose group over individual health insurance include:
- HMO Health Insurance Plan: The popular HMO plan, which stands for health maintenance organization, offers a wide range of health care services for participants through a provider network. The provider contracts with the HMO exclusively to provide health services to members at lower rates than they would pay on their own. Most HMO style small business health insurance plans require participants to choose a primary care physician and receive a referral or prior authorization to see a specialist.
- HSA-Qualified Health Insurance Plan: Typically paired with a preferred provider organization (PPO) account, a health savings account (HSA) enables members with high-deductible plans to set aside money to pay non-reimbursed health care expenses on a pre-tax basis.
- Indemnity Health Insurance Plan: This type of plan typically allows members to visit the doctor or hospital of their choosing. The health insurance company then pays a percentage of the charges. Some services require the employee to pay upfront and receive reimbursement from the health plan later.
- PPO Health Insurance Plan: Similar to an HMO, a PPO small business health insurance plan requires members to choose a primary doctor and receive their health care services through a network of Colorado providers to incur the lowest out-of-pocket cost.
Most Common Characteristics of Small Business Health Insurance Plans in Colorado
Some Colorado small business health insurance plans cover all medical, pharmaceutical, vision, and dental costs according to an established schedule. However, it is just as common for Front Range employees to receive each of these services through separate insurance companies.
The following are typical expenses that a small business health insurance plan would require the covered individual to pay in addition to the amount it paid on his or her behalf:
- Co-insurance: If a health insurance plan has a deductible, co-insurance is usually the percentage of costs the insured pays up to an established maximum after meeting the deductible. Other plans require participants to pay co-insurance towards each doctor visit regardless of whether a deductible exists.
- Co-pay: This is typically a nominal set amount the insured person or his or her dependents pay for each medical appointment. Amounts ranging from $20 to $40 for co-pays are typical.
- Deductible: A deductible is a set amount the covered family or individuals must meet before the insurance plan pays any benefits. HSA accounts (see above) have grown in popularity over the past 10 to 15 years due to an ongoing increase in member deductibles.
- Premium: This is the amount the person receiving the health insurance policy pays to keep it in force. Employers typically pay a more significant percentage of the premium as a benefit and part of the employee’s total compensation package. Those purchasing health insurance on their own must pay the full premium but may be able to obtain assistance with payments through the Connect for Health Colorado health insurance marketplace.
Colorado business owners who feel uncertain with the numerous choices available of small business health insurance plans. For help wading through the option and features to offer employees, you should strongly consider meeting with a top-rated Colorado small business health insurance broker receive proper guidance.