Small Business Health Insurance

Research on small business health insurance has consistently shown that small businesses are much less likely to provide health insurance to their employees than larger companies. Small businesses are typically defined as having between two and fifty employees.

In fact, the smaller the business, the less likely it is to offer health insurance benefits. As recently as 2003, about 50% of the uninsured in the United States were either self-employed or worked for companies with less than 26 employees.

The primary reason for this disparity is cost. Health insurance for small businesses is typically more expensive than for larger companies (on a per employee basis) because it is more difficult for insurance companies to predict the average cost of medical care for a small group.

That is, risk is greater for insurance companies for small businesses since small businesses have fewer employees to spread the risk of health claims. It only takes one employee with significant health claims to have a significant impact on the overall costs for the group insurance. This is also the reason why small businesses do not self-insure; the financial risk is simply too great for the majority of small businesses.

So what can a small business do if it wants to offer a small business health insurance plan to its employees? Often they have no choice but to pay the premiums. More often than not they will split the cost of premiums with their employees, typically 50/50. Unfortunately, these small business health insurance plans are not only quite expensive, but may also include significant deductibles and co-payments for the insured.

Small businesses can sometimes reduce their health insurance costs by either joining or forming a purchasing cooperative to negotiate better rates and benefits from companies offering small business health insurance. Depending on the type of business, professional organizations can also offer better health insurance rates to small businesses. As a small business owner, you may also want to contact your state department of insurance and inquiry about small business owner health insurance.

Small businesses should seek out several small business health insurance quotes before deciding on any group plan. One of the best places to start the process is on the Internet. Within a very short period of time, small business owners can access dozens of quotes from several insurance companies, making comparison of various plans much easier.

The best place to obtain multiple quotes is to use the free services of an online health insurance broker. At LearningAboutHealthInsurance.com we highly recommend eHealthInsurance. Over a million health insurance shoppers have found success in using their services.

When looking for affordable and quality small business group health insurance, eHealthInsurance offers plans from over 140 leading health insurance companies. You can expect to receive unbiased advice from licensed professionals, as well as receive free and instant health insurance quotes and apply for insurance - all online from the comfort and convenience of your own home.

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