How Much Does Small Business Health Insurance Cost on Average?

Do you own a small business? Maybe you’re considering getting your employee’s health insurance for the first time? Perhaps you’re thinking of switching from your current small business healthcare plan?

In 2019, the average cost of small business health insurance is almost $15,000 per employee per year. Read on to see just how much does small business health insurance costs.

Group Plans

One way to go about obtaining health insurance for your small business employees is by getting a group plan. if you choose a small group health plan you can expect the deductible to be around $3,140 per year.

By using a small business group healthcare plan you can save significantly. You’ll end up paying about $6,184 each year per employee. Small businesses cover 84 percent of their employee’s costs.

That’s less than half of the national average which as mentioned above is just under $15,000. These numbers reflect single-payer premiums. Large firms pay about 80 percent of theirs.

When it comes to family plans small businesses contributed 60 percent of the cost which comes to about $12,432 per year. On the other hand, large companies cover 74 percent of their employee’s family flans.

That comes to about $15,446 annually. On these shared cost plans, small businesses saved just over $3,000 each year per employee, when it comes to family plans.

The reason group plans are less expensive than individual employee health insurance is that there’s less risk involved in the group plans. This page will help you to not blow your budget.

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Small Business Health Insurance Copay

Small business insurance copay is what an individual will have to cover for their healthcare costs. Copays are typically required for medical supplies and services.

Specialist office visits, certain types of therapy, and ambulance pick-ups or emergency room visits need copays as well.

HMO, PPO, and EPO plan almost always have copays attached. If you go to an out of network provider, you may not have a copay requirement. In that case, you’ll have to pay the whole bill.

Out of Pocket Costs

Out of pocket costs will have a maximum limit. Once you’ve reached this limit the health insurance company is required to pay for all of your healthcare needs in full.

They’ll do so for the remainder of the year as long as the services are covered in your insurance plan.

What Factors Determine the Cost?

There are three main factors that determine health insurance premiums. Factors such as the age of the employee, how you shop around for your coverage, and whatever your premium payment preference might be.

A fourth factor is which city the employee lives in.

Small Business Health Care Tax Credit

Your business might be eligible for a small business health care tax credit. If you have less than 25 employees and your annual pay to employees doesn’t exceed $54,200 per person.

Also, your premiums need to be paid through a qualifying agreement with your insurer.

Small Business Health Insurance Cost

As you can see, your small business health insurance cost can vary depending on what avenue you choose to take. It also varies because of employee age, city, where you shop, and your premium level.

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Check out our business blog for more great information and tips.


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