With two full-time employees or more, you may qualify for health insurance through a small business group plan. Other options for small businesses may include health reimbursement arrangements and tax stipends.
Size varies greatly among small businesses depending on industry and employee count, while larger organizations generally produce greater revenues than their smaller counterparts.
Health insurance
Health insurance is an invaluable benefit to employees and a key element of many businesses’ compensation packages. While small businesses may not have the resources available to them to offer traditional group health plans, they still can offer employee perks such as Health Reimbursement Accounts (HRA). HRAs offer tax-free ways for employers to reimburse employees’ medical expenses tax free compared with group plans, often at less expense than group plans requiring minimum participation requirements and with no minimum membership threshold requirements, you can offer HRAs to all of your employees!
Even though it may seem counterintuitive, most small businesses do not provide health insurance to their employees. According to KFF research, only 39% of small firms with three to nine workers provide benefits, usually because they cannot afford the premiums associated with traditional group plans or find that available policy options don’t meet employee benefits needs; furthermore they often do not possess either the time nor expertise needed for managing administrative reporting requirements associated with traditional group health plans.
To qualify for group health insurance, a business must employ at least two full-time employees who do not include family, spouses or partners of either. Seasonal or temporary employees can also be hired by the business without counting towards its minimum employee requirement; and furthermore it must have existed for at least one year.
If your business meets these criteria, the Small Business Health Options Program (SHOP) Marketplace is a good place for purchasing small group plans. By pooling risk and decreasing administrative complexity, this platform aims to increase purchasing power while decreasing administrative complexity for small businesses. You could even qualify for federal tax credits of up to 50% of premium costs!
The Affordable Care Act (ACA) has altered the rules surrounding companies offering health and welfare benefits to employees. While employers with more than 50 employees must offer health insurance or face penalties, smaller businesses don’t need to; but providing health benefits could still attract talent while improving work productivity.
General liability insurance
No matter whether you run a store or tech company, risks to your business exist and general liability insurance can help to cover them. From accidents or injuries sustained on-premises to legal costs related to an error-related lawsuit filed by customers or clients alike. While this policy won’t cover data breaches or cyber attacks requiring extra coverage (such as data breaches or cyber attacks), it will cover customer property damage as well as losses suffered as a result of a disaster – making it necessary in some contracts or lease agreements.
Even when your best efforts are put forth, things can still go wrong. A customer might slip and break their wrist on your floor or a fire could decimate your inventory – these events require financial coverage to pay for medical expenses, repair or replace lost items and legal defense if sued for infringing copyright or trademark rights. Small business insurance provides valuable relief in such instances of disaster.
Although most states do not mandate it, carrying employee negligence insurance can protect your business against costly lawsuits and related expenses that can arise from employee error. It should be a requirement of businesses meeting clients at their locations or providing physical access to equipment; some work contracts also stipulate it as part of their terms. It might also be worthwhile considering product liability coverage for your enterprise.
Cost of general liability coverage depends on a number of factors, including size and industry of your company as well as location and past claims history. It’s often more cost effective to purchase general liability as part of an umbrella policy such as Insureon’s business owners policy (BOP), which bundles together general and property coverage at an average monthly cost of about $57 according to Insureon.
Wakefield Research conducted the NEXT Insurance survey online with 500 small-business owners/decision makers from February 1-10 2023 and found a margin of error of plus or minus four percentage points; samples were weighted to reflect actual U.S. population demographics and results are considered valid and reliable; however accuracy or completeness cannot be guaranteed. For more information, contact Wakefield Research’s researchers at NEXT Insurance.
Commercial insurance
As any small business with employees knows, providing them with a safe working environment is of utmost importance. Therefore, most employers provide their staff with commercial insurance policies to cover them against liability issues posed by third parties. Some policies are required by law while others are optional depending on several factors including industry type, location and size of company; in addition to this some states mandate certain minimum levels of coverage must be offered and how it can be purchased.
Small businesses can purchase health insurance coverage for their employees through the SHOP marketplace, a federal program offering affordable yet high-quality coverage at an affordable cost. While rules differ by state, using its search tool you can locate suitable coverage for your business. Not all small businesses qualify as not having enough employees satisfy its minimum criteria is enough for eligibility in some instances.
Under the Affordable Care Act (ACA), small businesses must employ at least two full-time employees in order to qualify for group health coverage under SHOP programs. Each full-time worker must work an average of 30 hours each week. They cannot also be part of your ownership group or an employer of your business – seasonal or temporary employees cannot count towards this criterion either.
Small businesses can utilize other insurance solutions besides SHOP marketplace to give their employees access to affordable healthcare coverage, including individual coverage health reimbursement arrangements (ICHRAs). With these arrangements, employees select their own plans while employers reimburse tax-free for its costs; making these more flexible than traditional large group health coverage arrangements while helping smaller firms meet ACA reporting and coverage minimum requirements.
Small businesses should purchase various other forms of insurance coverage, including workers’ compensation and property coverage. Depending on your industry or field of endeavor, additional coverage such as commercial auto or professional liability may also be necessary – selecting the appropriate type is key to the success of any small business venture.
Business owners policy
Operating a business presents many obstacles, yet having adequate insurance can help mitigate risk. Unfortunately, however, according to NEXT Insurance’s survey 90% of small business owners do not feel they have enough coverage and this puts their operations at risk of imminent collapse.
There are multiple methods available to businesses looking for small business insurance coverage, including the Small Business Options Program (SHOP), which offers private coverage to small companies employing two to 50 full-time employees1. Plans from SHOP are readily available from various sources and you can buy them throughout the year; alternatively, independent agencies also provide quotes and provide insurance policies.
BOPs, or commercial package policies, provide small businesses with another insurance solution for a low monthly premium. Ideal for contractors, restaurants and retail stores – BOPs can be found through many insurers with prices depending on employee count, industry sector or other variables affecting price; so be sure to shop around before selecting an insurer as BOP costs can differ considerably between insurers based on these variables alone – it’s always wise to reevaluate your needs each year to stay compliant.
While a BOP provides valuable coverage, it is not the complete answer to protecting small business risks. Small businesses should consider additional policies like workers’ comp and commercial auto to cover medical costs and lost income from work-related injuries; workers’ comp is typically mandatory in most states while commercial auto coverage protects vehicles used for work-related activities and is also often mandated.
While it might be tempting to purchase smaller monthly premiums to save money, paying your annual premium in full upfront will often save more than the difference in monthly premiums. Furthermore, it is wise to conduct an annual assessment of business risks with an independent agent in order to ascertain how much coverage is necessary.
