Most employees consider health coverage the most important employee benefit. It is an attractive benefit for an employer to offer, since the cost is tax deductible, and surveys have shown that offering health insurance is good for increasing retention, improving recruitment and attitude, and lowering absenteeism. However, not all insurance plans are an equally good bargain for a business. Below are some guidelines for choosing a health plan that will work well for your company.

What Type of Health Insurance Should My Company Offer?

Traditional health insurance is the choice of most small businesses. Its biggest advantage is the flexibility it provides employees, allowing them to visit any doctor or hospital. However, it is sometimes more expensive to offer than managed care plans. Some managed care plans offer a "fee for service" option that mimics the freedom of traditional insurance. Although it allows greater choice, the co-pays and deductibles that employees pay can be very high. Before looking for an insurance broker or evaluating plans yourself, you should think about what your business wants in an insurance plan and create a list. The list may also include such desires as dental, mental health, or maternity coverage, and whether your company may want to provide insurance for employees' dependents.

Should My Business Use an Insurance Broker?

Most small businesses purchase group health plans from a broker. Brokers usually offer plans from five to fifteen insurers, and can be a great help in comparison shopping. When choosing a broker, it is often best to find one that has experience in dealing with businesses of a similar type and in the same industry as yours.

Getting a recommendation for a good broker can also be important. Not all brokers are ethical. Insurers will only issue one quote to a business seeking coverage, so some brokers "paper the market" by getting bids from almost all available insurance providers. This effectively locks your business into working with the broker. Some brokers also may offer a computerized search that supposedly compares all policies on the market, but which is rigged to recommend only those that the broker sells.