Own a Business? Here's Why You Need Health Insurance.
Research shows that good employee health is more likely to deliver optimal performance in the workplace. Healthy employees not only have a better quality of life, but they also benefit from having a lower risk of disease, illness, and injury, as well as increased work productivity and a greater likelihood of contributing to their communities.1 Read on to find out how health insurance works, what the difference is between out of pocket vs deductible, and why health insurance for self employed, and small business owners is so important.
How does health insurance work?
Health insurance is a legal agreement between you and a health insurance company. You agree to pay a premium, usually every month, which is the price for having the health plan. In return, you get a health plan that helps you pay for certain medical care and services, so you aren’t stuck paying for all of the costs on your own. Preventive care is also covered and includes things like your annual check-up, flu shot, vaccinations, certain wellness screenings, and more.
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Preventive care and employee health
Small business owners have found that there is a direct correlation between employee health and productivity at work. Why? Because when employees are healthy, their office engagement increases.2 A healthy workforce means less absenteeism due to illness, improved morale, increased productivity, and higher employee retention. Employees also get the benefit of increased job satisfaction and an improved ability to handle stress.3
Health insurance makes a difference in how healthy someone is. Uninsured people are far more likely than those with insurance to postpone health care or forgo it altogether. The consequences can be severe, especially when preventable conditions or chronic diseases go undetected.4 The best way to boost employee health (and, therefore, productivity at the office) is to eliminate barriers to health care for your employees and offer health insurance.
Health insurance for small business owners provides employees with access to a host of free preventive services that can improve employee health and reduce the risk for diseases, disabilities, and death. Since the passage of the Affordable Care Act, Marketplace health plans and many other plans are required to provide preventive services without charging a copayment or coinsurance (even if the annual deductible hasn’t been met.)5 FREE preventive services include :6
- Depression screening
- Blood pressure screening
- Alcohol misuse screening and counseling
- Diet counseling for adults at higher risk for chronic disease
- Immunizations for adults — doses, recommended ages and recommended populations vary: Chickenpox (Varicella), Diphtheria, Flu (influenza), Hepatitis A, Hepatitis B, Human Papillomavirus (HPV), Measles, Meningococcal, Mumps, Whooping Cough (Pertussis), Pneumococcal, Rubella, Shingles, and Tetanus
- Abdominal aortic aneurysm one-time screening for men of specified ages who have ever smoked
- Aspirin use to prevent cardiovascular disease and colorectal cancer for adults 50 to 59 years with a high cardiovascular risk
- Cholesterol screening for adults of certain ages or at higher risk
- Colorectal cancer screening for adults 45 to 75
- Diabetes (Type 2) screening for adults 40 to 70 years who are overweight or obese
- Fall prevention (with exercise or physical therapy and vitamin D use) for adults 65 years and over, living in a community setting
- Hepatitis B screening for people at high risk, including people from countries with 2% or more. Hepatitis B prevalence, and U.S.-born people not vaccinated as infants and with at least one parent born in a region with 8% or more Hepatitis B prevalence
- Hepatitis C screening for adults age 18 to 79 years
- HIV screening for everyone ages 15 to 65 and other ages at increased risk
- PrEP (pre-exposure prophylaxis) HIV prevention medication for HIV-negative adults at high risk for getting HIV through sex or injection drug use
- Lung cancer screening for adults 50 to 80 at increased risk for lung cancer because they’re heavy smokers or have quit in the past 15 years
- Obesity screening and counseling
- Sexually transmitted infection (STI) prevention counseling for adults at higher risk
- Statin preventive medication for adults 40 to 75 at high risk
- Syphilis screening for adults at higher risk
- Tobacco use screening for all adults and cessation interventions for tobacco users
- Tuberculosis screening for certain adults without symptoms at high risk
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What does health insurance cover?
Aside from preventive services, different types of health insurance offer different types of coverage for employee health. Other services could include:
- Outpatient care
- Trips to the emergency room
- Treatment in the hospital for inpatient care
- Care before and after your baby is born
- Behavioral health treatment
- Prescription drugs
- Physical therapy following an injury, disability, or chronic condition
- Lab tests
- Pediatric services
Health insurance for self employed
As an independent contractor or consultant, you decide when you work, who you work for, and what projects you work on. And you deserve that same flexibility to apply to your health insurance. Health insurance for self employed gives you:
- Peace of mind: Like homeowners’ insurance, health insurance is a safety net to catch you if you have expected or unexpected medical issues.
- Early intervention: Using your health insurance as directed and taking advantage of everything your plan has to offer can lead to early detection and early intervention for various health conditions.
- Protects your family: Do you have a spouse or dependents that rely on you? If so, health insurance is for you as much as it is for them. Having healthcare means you, your spouse, and your children can receive life-saving medical care without worrying about finding a doctor who will treat an uninsured patient. Health insurance for self employed also means you and your family can get the medications you need to treat illnesses and live a healthy life.
- Protects your savings: Medical bills without health insurance coverage can add up quickly. Don’t put your savings at risk by not obtaining health insurance.
Health insurance for small business owners
Now that you understand the importance of health insurance, it’s easy to understand why offering health insurance to your employees contributes to employee health and, therefore, your business’s health. Since health insurance typically covers preventive care, your employees can catch any health issues early on and seek medical treatment when needed.
As a small business owner, you can also take advantage of the benefits of a group health insurance plan such as:
- Lower premium costs
- Tax benefits
- Greater employee satisfaction and retention
It’s essential to recruit and retain top talent, and health insurance is one of the most sought-after benefits that can help attract job seekers and boost employee health. But more than that, caring about your employee’s well-being is something they will thank you for as a small business owner.
Out of pocket vs deductible
If you aren’t sure what the difference is between out of pocket vs deductible, you are not alone. These two terms are often confused for one another, so we want to break it down for you. It’s important to mention that since health insurance works on an annual basis, the amount of your out of pocket vs deductible will reset each year.
So, what is a deductible?
A deductible is an amount you have to pay before your health plan’s benefits kick in. For example, if you buy a health insurance plan with a $2,000 deductible, you will pay for the first $2,000 of your medical expenses. After that, your plan will start paying a share of the expenses. For example, your health plan may pay 80% of your medical costs for in-network providers, which leaves you responsible to pay the remaining 20%. Not all medical expenses count toward your deductible. Only medical expenses covered under your medical insurance will count towards the deductible.
What does out of pocket mean?
The term “out of pocket” refers to the most you will ever have to pay out of your pocket for health care during the plan calendar year. The out of pocket amount does not include your monthly premium but does include your deductible, copays, and coinsurance. If you hit your out of pocket amount for the year, your insurance will pick up 100% of your health care costs after that. Like your deductible, not all medical expenses will count toward your out of pocket amount.
As you can see, the terms out of pocket vs deductible have their similarities and differences. Your deductible is the amount of money you have to pay before your health insurance kicks in and helps pay a share of expenses, while the out of pocket amount is the maximum amount you will have to pay in a given plan calendar year.
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Are health insurance premiums tax deductible?
If you are an employee enrolled in an employer-sponsored plan, chances are your premiums are made through a payroll deduction, and you would not be allowed to claim a year-end tax deduction. You can deduct your health insurance premiums—and other healthcare costs—if your expenses exceed 7.5% of your adjusted gross income (AGI). Self-employed individuals who meet specific criteria may be able to deduct their health insurance premiums, even if their expenses do not exceed the 7.5% threshold.7
Where can I buy health insurance?
Woligo understands the importance of health insurance and employee health, which is why we put together an all-star team of professionals that stand ready to help you sort through your options and obtain health insurance. Whether you are a freelancer looking for your own insurance or a small business owner seeking a health plan for your employees, we are ready to find the best option for you.
- Get a quote within minutes
- Receive your custom quotes via mail, email, or text
- Compare types of health insurance from private carriers and the Marketplace
- Sign up is easy – we do the hard part for you
- We provide year-round service for billing or claims issues
Which health insurance is the best?
The answer is: it depends. The importance of health insurance is the same across the board, but the best health insurance is subjective to the specific individual or company, based on their particular needs. The needs for health insurance for self employed individuals would probably be different from the needs of health insurance for small business owners that also have a team of employees to think about.
With all of the different types of plans and providers out there, you must work with a knowledgeable insurance broker that can help you navigate through all of your options to find the best plan suited for you. Insurance brokers through Woligo are ready to scour the ends of the earth for you, AKA search through all national and regional carriers in the individual market, both on and off the Marketplace. (CA excluded)
Within minutes we can have a plan comparison of the best employer-sponsored health insurance that illustrates plan features and costs. Proposals can be emailed, printed, and sent via text directly from our system, depending on your preference.
The importance of health insurance
Health insurance for self employed and small business owners is essential for SO MANY REASONS. No one plans to get sick or hurt, but most people need medical care at some point. Health insurance helps improve employee health, covers these costs, and offers many other essential benefits : 9
- Health insurance covers essential health benefits critical to maintaining employee health and treating illness and accidents
- Health insurance protects from unexpected, high medical costs
- You pay less for covered in-network health care, even before you meet your deductible
- You get free preventive care, like vaccines, screenings, and some check-ups, even before you meet your deductible
Health insurance is vital to boost employee health, prevent illnesses and get the medical care you need if you do become sick or injured. As an independent contractor, a medical issue could mean missing a deadline and losing out on income. For a small business owner, that might mean a sick employee in the office, if they can even come in and work at all.
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- Engaging Employees in Their Health and Wellness (cdc.gov)
- Preventive Care & Screenings | Economic Alliance for Michigan (eamonline.org)
- What 3 Companies Are Doing to Keep Employees Healthy (entrepreneur.com)
- The Uninsured and the ACA: A Primer – Key Facts about Health Insurance and the Uninsured amidst Changes to the Affordable Care Act – How does lack of insurance affect access to care? – 7451-14 | KFF
- Preventive care benefits for adults | HealthCare.gov
- Preventive care benefits for adults | HealthCare.gov
- Are Health Insurance Premiums Tax-Deductible? (investopedia.com)
- Small Business Health Care Tax Credit and the SHOP Marketplace | Internal Revenue Service (irs.gov)
- See How Health Insurance Coverage Protects You | HealthCare.gov