Finding a Better Insurance Deal

If your businesses has difficulty finding affordable coverage directly from insurers, you may want to contact your state department of insurance to learn about small business group health providers in their area. Small businesses also can join an association that offers group benefits for their members. However, before taking advantage of any such plans, your business should scrutinize them as carefully as any other plan it might evaluate.

Evaluating a Policy

Look to the list of policy criteria you created. A plan should meet those goals as closely as possible.

Cost. The next step is to look at cost -- to the employees as well as to the company. Look at the cost of the plan, the deductibles, and co-insurance costs. How much of the plan will the company be able to pay for. If it can't pay for the entire cost, how much will the employees have to contribute? Is it in line with their salaries? For example, some companies offer health insurance at rates that are wholly out of line with their employees' means. For example, an employer might as well not offer an employee insurance if the employee must pay 100 percent of a $250 per month policy on take-home wages of $1200 per month. Also, the employer should calculate whether deductibles and co-insurance exceed what an employee can afford on his or her salary. An employer should be wary of any plan that requires employees to pay for more than 25 percent of treatment costs, or which charges co-insurance for medical expenses in excess of $10,000.

Coverage. Next, the employer should read the fine print about what types of conditions are covered. Some policies will limit coverage to specific conditions, or cover them only up to a ridiculously low maximum payment. Coverage for long-term illness and pre-existing conditions are areas where these low limits are often seen. The total coverage for the policy should be at least $1 million, since costs for treating catastrophic illnesses can easily reach this amount.