You think it is tough to open a business and putting yourself to the path of achieving your dreams. Wait, till you have to offer employee benefits, it gets tougher…
Here are few tips to make shopping for employee health insurance easier:
You need “2”: Make sure that you have at least 2 employees/owners in the company before you start shopping for group insurance. Husband and Wife businesses are eligible to get a group plan as long as they can be linked to company as an employee or owners.
You must be in business for at least 6 weeks before you can get a CA group plan.
Payroll: It is much easier for companies that have a proper payroll to get a good group health insurance plan. Insurance companies look at small businesses very strictly to make sure they are eligible for group plans.
Legal Structure: Make sure that the company is set up properly as a LLC, C-corp, S-Corp or partnership. If you have a corporation from Delaware, make sure you have applied for business license in CA and also filed Statement of information with CA Secretary of state.
Pre-existing Conditions: Most HMO plans do not have any pre-existing condition waiting periods in CA. Also, there are no pre-existing exclusions on PPO plan if you have a continuous coverage with no more than 63 days gap. If you have a medical problem and do not have any prior coverage then it will be best to go on HMO plan. Maternity in group plans in not considered a pre existing conditions.
Employer Contribution: Insurance companies in CA require employers to pay at least 50% of the employee only premium or minimum $100 whichever is less. It is always good to offer few plans to employees so they have choice and can pick plan as per their family requirements. You can offer a basic plan and employee can pay the difference if they want to upgrade.
Use of Pre-Tax dollars: One of the biggest advantages of having a group plan is that both employer and employees make their contributions from pre-tax dollars deducted through their payroll. Make sure to ask about Section 125 POP plan
Find an experienced broker: More than 70% of the small business underwritten by insurance companies in CA comes from a broker community. Brokers are equipped to quote and compare several insurance companies at one spot. You do not need to go deal with several insurance companies to get a quote. Brokers are paid by insurance companies and there is no additional charge to your business if you use the services of brokers.
If you have any questions, please feel free to contact Sunny Sethi of Matrix Insurance Agency @ 888-704-8243 extn 101. Email: email@example.com