Insuring your “Pack”
You have your own business. Now what, as it relates to Health Insurance? Do you need to cover yourself or can you utilize a family member’s plan? Should the plan be just for yourself or cover your “pack” as well? These are a few of the questions a small business owner needs to ask themselves, at a minimum, upon opening, and annually, thereafter.
If you have employees, the most common method of handling this part of a business appears to be working through a Licensed Insurance Agent. Clients in my Banking Career used their Agent for anywhere from five (5) to 1000 employees. It will take the burden off of you to do the ground work. The Agent will add a commission fee to the price but it is usually offset by the cost of negotiating and receiving reduced rates based on experience, contact, and knowledge.
The next common approach is to use the HR offerings of the firm’s Payroll Agent, such as ADP or Paychex or any other Payroll Company. Ask if they have HR functions which include negotiating and setting up HealthCare. This seems to be the preferred option for businesses with employees of one (1) through five (5).
The wildcard is your local Chamber of Commerce. Many offer this service but need to work with the company directly on details such as number of employees, detail of their work scope, what percentage of contribution the employer wants to cover, if any, years in service, industry, etc. Many factors drive the risk and the pool they are able to group your company into to share the risk. The more firms in the pool, usually the lower the cost to each employer. This is usually handled by a Licensed Insurance Agent on staff at your Chamber. The larger Chambers require a minimum number of employees, usually at least two (2) to consider this offering. Chambers that target small businesses will often have the most competitive plans available for sole proprietors, something to be cognizant of when you call for a quote.
In many ways, your local Chamber acts as the same Insurance Broker as your own Insurance Agent. However, if your local Chamber offers Health Insurance for you, as an owner, or also includes Plans for your employees, why not review their offerings? If you have a business consultant or office manager or a CPA willing to perform this function for you and gather all the necessary paperwork to solicit multiple quotes from Chambers, Insurance Agencies, and even third party Brokers, where all they do is broker Health Insurance Plans, it is likely worth your money to pay a Circle of Trust Advisor to take on this project.
Direct negotiations were not recommended by many of the firms I used to work with as their banker. They felt that the “security in numbers” offered by an Insurance Agent or a Chamber offered less stress on the individual company and the best options to be considered. Again, over the years, several did indicate the small businesses should really compare ADP/Paychex/Other Payroll Providers to their Insurance Agent/Chamber as well.
Given the new Pandemic world we operate in, I do believe the analysis of Health Insurance will be the most intense component of the business evolution and it should be given proper time for research and analysis. Much like the dogs in our highlighted photo of the week (one is deaf and nearly blind so comes with pre-existing conditions), no two (2) are ever alike and you may need to consider how much you and your business are willing to invest in this employee benefit. Understand your budget, formulate a clear plan regarding health insurance for you as the owner and for your employees, and investigate your options thoroughly on how to best keep your “Pack” healthy and safe.
Be well.
