Health insurance for small businesses
You decide to give up your routine 9 to 5 job and start a small business, for example, a toyshop. You find an ideal location, obtain the necessary finance, contact suppliers, advertise for personnel, apply for insuranceand cover the necessary bases for launching your enterprising business.
Wait a minute! Did you cover all the aspects of insurance Did you obtain health insurance for your employees If not, you are in trouble!
First and Foremost you should note that you would be considered for small business health insurance coverage only if you are employing up to 50 employees. If you have no staff at all, and are working on a self-employed basis, the health insurance policy will be totally different.
What Should Be Covered In A Insurance Plan
If one of your employees is laid low by an illness or in injured while working, legally he or she must get compensation vis--vis medical expenses as well as wages lost as a result of not being able to work while recovering. Most insurance packages also make provision for the possibility that the employees children or spouse will sue you. You can also opt for cover in the possibility that an employee files a claim of sexual harassment. You should go in for this option if you have a major control over the actual working of your employees and your business is expanding on a large scale.
Note: It is the State that determines the rates for workers compensation insurance, so you need to check that the firm you choose is properly licensed in your State.
Picture this: A customer comes into your toyshop. She wanders around, looking for an ideal gift for her son. Suddenly, she skids on a skating boardThud! She has landed awkwardly, with her hand bent at an unnatural ankle. Ouch! This exclamation will not only emanate from her lips as she screams in agony; it is likely to come from yours, too, if she makes a claim on you. BUT not if you had taken a good health insurance plan -The possibility of an accident or an injury occurring on your work premises is covered by General Liability.
You must go in for disability insurance in the eventuality that a severe accident keeps one of your important staff members away from the business for a very very long time. If you choose to go in for a short-term policy, you will obtain the benefits within two weeks, whereas for a long-term coverage, you will get them maybe within a month or even a year. Dont forget to take this policy for yourself, too after all, YOU are the one operating the business! In fact, it would also be wise to apply for insurance that would cover the rent you pay for the premises and the salaries that are paid to your employees this comes under business overhead insurance.
In addition to the above you need to consider the following:
If your business is booming and you decide to open a second shop in another location, you will probably need the use of a delivery van. In that case, you should go in for auto insurance so that in case of an accident you are covered, but ensure that you are sufficiently covered.
Be prepared for an unexpected fire in your toyshop and get your premises covered. However, get an insurance policy that provides coverage for all possible risks and not merely specific ones.
As the owner, you need to get a life insurance policy. This is generally required if you apply for a Bank loan, as in the unfortunate case that you enter the pages of history, the Bank benefits. A permanent life insurance policy should cover your family members, so that they benefit and not your creditors in case of your death. Also, find out about insurance if you are in partnership with someone. If that partner dies, are you in a position to buy back his stock from his family members If not, you may no longer be the one in the owners seat you may have another too-interfering partner.
Types Of Policies
HMO (Health Maintenance Organization): This is a pre-paid health-care form of managed care. Under this, your employees must refer to a doctor who is directly employed by the HMO or is under contract to that HMO. If hospitalization is required, treatment should be at a hospital on the list of hospitals approved by the HMO.
PPO (Preferred Provider Organization): Under this, you need to pay only a specific amount per month while the insurance company pays up for medical expenses. However, usually this plan creates very expensive dents in your wallet. For, in addition to the premium, you need to pay some extra costs vis--vis the difference in payments that will come up between what you are charged by the health-care provider and what the insurance firm considers as appropriate fees for its service. Nevertheless, on an overall basis, expenses towards health care are generally low within the network of PPOs.
POS (Plans Offer Savings and Flexibility): Under this plan, it is a prerequisite that you select a primary care doctor from those approved within the network and he or she alone would keep a check on your health care. Also, all the necessary paperwork is done for you. This doctor can refer you to a specialist who does not fall within the purview of the network, but in that case, your insurance firm will offer only part of the compensation. Though this plan may overall be less expensive than a PPO, keep in mind that the co-payments for health-care outside the network tends to be high.
MSA (Medical Savings Account): It should be specified here that an MSA is not to be considered an insurance plan, but is actually an avenue via which your medical expenses are covered for in case these are generally very high. What you do is make a deposit into an account on a regular basis after opting for a policy with high deductibles. These amounts will pay towards costs for prescriptions and visits by the doctor. If you are fortunate in not requiring the amount, rest assured it will not remain dormant it will gather interest till required or till you retire.
Note: The account must adhere to guidelines as laid down by the Government. Also, there are some financial restrictions, which you need to check out.
Important Note: Keep in mind that this article aims to only provide a few guidelines and should not be considered a source of the best or only advice for health insurance for small businesses. It is always advisable to seek the advice of a professional who can give your proper guidance and it is up to the reader to make a final decision on which type of health insurance plan is suitable for his or her small business.
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