Offering your employees health benefits is a simple and easy way to stand out from the competition. Especially in today’s competitive job market. Offering comprehensive health options goes a long way in attracting new talent, and retaining current employees. With that being said, for the average business owner it can be difficult to understand all of the associated costs. No one likes surprises when it comes to their wallet. That’s why we’ve put together a brief guide exploring the average price of health insurance for small businesses. By examining the cost estimates for businesses based on employee size, and the variables that affect these expenses. You’ll have everything you need to make an informed decision and protect your workforce.
Understanding the Cost of Health Insurance
The cost of offering health insurance to employees varies significantly based on a number of factors including:
- The size of the company.
- The plan type selected.
- The business’s location.
- The employee demographics.
Nonetheless, knowing the typical expenses will help you determine what the best health solution is for your team based on needs and budget.
Examining Costs by Business Size
- 1-5 Employees: When it comes to group health insurance, the cost of coverage is higher if you have less employees. This is mainly because group health insurance pools the risk of every person in the company together. So, when a company has more employees, the risk is spread across far more people, which leads to more predictable costs for insurers. In general, a business with 1 to 5 employees may anticipate paying between $400 and $600 per employee, per month for health insurance premiums.
- 6-10 Employees: As mentioned, once a business starts to grow in size, the risk becomes more spread out, and the costs go down. On average, companies with 6 to 10 employees will pay somewhere between $350 and $550 per employee, per month.
- 10+ Employees: Once a company’s employee size becomes greater than 10, you’ll start to see some significant savings. While the price still may vary quite a bit, the average cost per employee, per month is around $300 to $500.
While these figures are very useful to get a grasp on average health costs, it’s important to recognize that they are rough estimates and can vary significantly. Oftentimes, there are also additional costs that the employer must pay such as deductibles and copays, which add to the overall expense.
Key Factors Contributing to Health Insurance Costs
- Plan Type: One of the main factors influencing costs is the health insurance plan selection. Higher premiums are typically associated with plans offering more extensive coverage, smaller deductibles, and fewer out-of-pocket costs. When comparing different plans, it’s important to find a middle ground between the level of coverage, and affordability.
- Employee Demographics: The cost of insurance is significantly influenced by the employees’ age and health. Higher rates are typically associated with older workers and those with pre-existing medical issues. Another consideration is gender. Insurance providers oftentimes set varying premiums according to the gender distribution of their workforce. On average, the premium for women is higher than premiums for men.
- Geographic Location: The location of your business also factors in greatly to the price you’ll ultimately pay for employee health coverage. In general, areas that have higher medical costs, or limited access to healthcare providers will raise the price of your plan.
- Deductibles: Insurance plans that have higher deductibles will usually have lower monthly premiums, and vice versa. For small businesses with limited budgets, it may be smart to opt into a high deductible plan to save money upfront. Just be sure to keep in mind that employees will have to pay more out-of-pocket costs before their health insurance coverage kicks in.
- Legal Requirements: Both state and federal laws have an impact on the cost of health coverage. It’s worth paying attention to regulations outlining the minimum level of coverage, employer contributions, and the required inclusion of certain types of care. All of these regulations and more can vary in different areas and will ultimately affect your overall costs.
Finding the Best Coverage
As you attempt to find the best coverage for your workforce, it will help you to utilize an insurance comparison tool like Group-Health-Quotes.com (GHQ).This platform offers streamlined solutions for business owners looking for insurance coverage. GHQ lets you quickly compare a wide array of coverage options, paying particular attention to budget requirements, and preferred benefits. Additionally, you’re able to view competing plans side-by-side guaranteeing you to walk away satisfied with your choice. If you’re interested in receiving a free quote or simply want to learn more, just fill out a form, or give us a call at 888-571-0291.
