Last week, the National Small Business Association (NSBA) published the 2014 Small Business Health Care Survey. The survey of 780 small businesses illustrated the health insurance challenges they face today. Two findings in particular caught our attention:

  1. Surveyed companies spent $1121/month per employee on health insurance premiums
  2. 74% of businesses bought the insurance from a local broker

Why is this important? NSBA member businesses are getting bad advice from traditional insurance brokers, resulting in nearly $12 billion per year in higher health insurance expenses.


Small Businesses Overpaid by 80% for Health Insurance

In the NSBA survey, small businesses reported average health insurance premiums of $1121/month to cover a 44-year old employee. That’s ~80% higher than the cost of most insurance plans. Using SimplyInsured’s small business health insurance premium database, the cost to cover a 44-year old employee should start at $450/month for a lower-cost basic plan and top out at $775/month for a high-end cadillac plan.

NBSA Members Paid ~80% Higher Premiums Than Comparable Plans

Small Businesses Overpaid by 80% for Health Insurance

The Cost to Small Businesses: $12B in Extra Health Insurance Premiums

The unnecessary extra health insurance expense takes a significant toll on small businesses. Collectively, 65000 NSBA members will spend an extra ~$11.5 billion on health insurance premiums. That’s a significant sum of money that could have been invested in business growth or higher employee wages.

Small Businesses Could Save $6200/Employee, NSBA Members Could Save $12B Per Year

Small Businesses Could Save $12 Billion in Health Insurance Premiums

With the same amount of money spent per employee, small businesses could have:

  1. Purchased a platinum-tier health insurance plan
  2. Contributed the max $2500 to a flexible spending account
  3. Still saved $1700 for the business (13% savings)

Why Do Small Businesses Overpay? Bad Advice from An Insurance Broker

How did these small businesses end up overpaying by so much? The most likely culprit – bad advice from an insurance broker. The NSBA survey showed 76% of companies purchased health insurance from a traditional insurance broker, and planned to use the same broker for the next plan. That’s not surprising, as 72% of small business owners manage their own benefit offerings.

However, traditional insurance brokers have several limitations, and the bad advice can easily lead to higher health insurance costs. A traditional broker’s biggest limitation is their inability to access, review, and analyze the hundreds of available small business insurance plans. Typically, traditional brokers are only familiar with a limited set of plans, and do not look beyond those plans to find better options. Less work for your broker, but higher costs for your business.

Traditional Broker SimplyInsured
Purchase of health insurance plans
Purchase of dental and vision plans
Online application process check_mark_red
Access to all available plans check_mark_red
Online Employer Dashboard check_mark_red
Online Employee Tools check_mark_red
Payroll Integration and Automation check_mark_red
Insurance Dispute Resolution and Advocacy check_mark_red

Make Sure Your Business Isn’t Overpaying for Health Insurance

Small businesses who overpay for health insurance end up facing difficult choices. The NSBA survey showed small businesses are considering reducing benefits, increasing employee contributions, or accepting less profit in their business as a result of high insurance costs. Capturing the savings available through lower health insurance premiums is one way for small businesses to mitigate the impact of these tough decisions.

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Make sure you’re not overpaying for health insurance! Get an instant price check to compare against your existing health insurance plan costs? Get an instant quote at http://www.simplyinsured.com/small-group/first-quote

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SimplyInsured Gets Some LUV From Southwest Airlines

by Xiao Sun on February 6, 2014

This month SimplyInsured is taking health insurance to the skies, with a feature in Southwest Airline’s Spirit Magazine. If you’re flying Southwest this month, check us out! (If you don’t have a flight coming up, you can also read the article online.)

In honor of this occasion, we present 4 ways getting health insurance on SimplyInsured is like flying Southwest Airlines.


4 Ways SimplyInsured Makes Health Insurance More Like Flying Southwest Airlines

SimplyInsured's Health Insurance Service Featured in Southwest Airlines Magazine

  1. Instant Online Price Comparisons
    When getting a plane ticket, you want to know what’s the cheapest and quickest place to get from Point A to Point B. Buying health insurance should be just as easy – you should know exactly what coverage you’re getting for your money, instantly and online. (Want to get an instant quote? Start here!)
  2. No Surprises
    Southwest Airlines doesn’t have hidden fees – you know exactly how much your trip costs. Healthcare should be the same – you should know the out-of-pocket costs for seeing the doctor, not figuring out some complex formula of deductibles, copays, and co-insurance.
  3. Excellent Customer Service
    Southwest doesn’t stop serving you after they have your business. They give you mobile boarding passes, timely updates on flight changes, and access to helpful agents. Your health advisor should do the same, but most brokers disappear after you buy your insurance. SimplyInsured is dedicated to providing you with helpful online tools and 24/7 access to our experienced health insurance experts.
  4. Free Snacks!
    We don’t have beverage carts and honey roasted peanuts, but we will send your team a box of healthy snacks when you sign up!

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Want some SimplyInsured LUV? Give us a call at 888.584.9220 or get a quote at http://www.simplyinsured.com/small-group/first-quote

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Small businesses want to offer great employee benefits, but often find it difficult given their limited budgets. We’ll show you how small businesses can provide employees with excellent health insurance benefits and Google-worthy perks, without breaking the bank.


Google Offers Amazing Benefits…and So Can Your Small Business!

Small Business Benefits

Google has been ranked as the #1 place to work in America for two years in a row. What makes working for Google so great? One reason is Google’s generous employee benefits and perks, such as comprehensive health insurance, low costs for medical visits, and company-wide wellness programs. Not surprisingly, Google spends a lot of money to provide employees with these generous benefits.

Here’s how to offer Google-worthy benefits on a small business budget: 

  1. Get the Best Health Insurance Plan (While Saving $1000-2000/Employee)
  2. Eliminate Employee Out of Pocket Expenses with Tax-Free HSA Contributions
  3. Invest in Company-Wide Wellness Perks using Health Insurance Savings

Step 1: Get the Best Health Insurance Plan (While Savings $1000-2000/Employee)

On average, small businesses spend nearly $6000 per year on each employee’s health insurance premiums. However, many companies can easily save $1000-2000 on premiums by selecting the appropriate plan for their company.

Health insurance benefits for small businesses are often vastly under-utilized, as many employees (especially younger employees) often only visit the doctor or emergency room once a year. Providing a cadillac health insurance plan is a nice gesture, but offers employees little meaningful benefit. In most cases, employees would be equally well off under a less costly plan. For example, a high-end “gold” plan costs $1800 more in annual premiums than a basic “bronze” plan, yet typically only saves employees $700 in out of pocket expenses.

Chart 1: Spending $1800 More In Premiums Only Saves $700 for Most Employees

Small Business Often Spend $1800 to Save Only $700 in Employee Expenses

Here’s a better option: Save $1000-2000 per employee on premiums by switching to a lower cost plan, and re-invest the savings into programs that will make a difference to employees.

(Helpful hint: Need help figuring out what makes sense for your company? SimplyInsured is an expert at advising companies on how to save money on health insurance premiums. Give us a call – 888.584.9220 or get an instant rate quote on our website.)

Step 2: Eliminate Employee Out of Pocket Expenses with Tax-Free HSA Contributions

Small businesses can greatly enrich benefits by re-investing the premium savings into tax-free health savings account (HSA) contributions. A company can fund a $1000 HSA contribution by using 55% of the premium savings. The HSA contribution would cover 100% of common medical expenses, leaving most employees with no out of pocket expenses. Any funds not spent in the HSA can be saved for future expenses.

HSA contributions also have the added benefit being tax-free, so employees get to keep the full contribution and not pay any income taxes. The HSA contribution enables employees to spend the full $1000, while a $1000 raise would only be worth ~$650 after taxes. Not only is the initial contribution tax-free, but any interest or investment gains earned in the HSA is also not taxed, growing an employee’s health expense nest egg over time.

Chart 2: Estimated Employee Out of Pocket Expenses after HSA Contributions

With HSA contribution, employees will have no out of pocket expense for most common medical needs

Since most employees are likely to have minimal medical expenses during the year, here’s a short list of alternatives the $1000 HSA contribution can be spent on:

  • 10 pairs of Warby Parker glasses
  • 150 pairs of contact lenses
  • 24 months of Adderall (if you have a doctor’s prescription!)
  • Lasik eye surgery

Step 3: Start a Company Wellness Plan

Finally, small businesses can use the remaining premium savings to offer their own version of Google’s wellness plans. While you might not be able to build a roller hockey rink just yet, small businesses can easily replicate other Google perks (at a much lower cost). In fact, this is an area where small businesses can exceed Google’s perks with a little creativity. For example, every SimplyInsured team member gets a Fitbit Force fitness tracker to measure our physical activity (or inactivity).

Google Perks and the Equivalent Small Business Hack

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Small business might not be able to offer all of Google’s perks, but can definitely create a compelling benefit package that employees will love. Ready to get started on a health insurance plan for your company? SimplyInsured helps companies save $500-1000 per employee on health insurance, enough to get a lot of gym memberships!

Give us a call at 888.584.9220 for a consultation, or get a quote at http://www.simplyinsured.com/small-group/first-quote

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Save Your Startup 85% On Health Insurance in 2014

by Xiao Sun on December 19, 2013

Health insurance under the Affordable Care Act is finally here. But there is good news! SimplyInsured’s guide to 2014 could save your startup 30-85% on your health care costs.

How to Maximize Your Health Insurance Discount

2014 Insurance Plan Decision Tree vF10

Our Advice:
  1. If your company’s average employee salary is over $50K OR employ more than 25 FTEs  – Purchase a group plan here www.simplyinsured.com
  2. If your company’s average employee age is over 50 – Purchase a subsidized individual plan by calling SimplyInsured (888.584.9220)
  3. If your company has fewer than 10 employees – Purchase a tax-credit eligible group plan from www.simplyinsured.com
  4. All other companies – Call SimplyInsured (888.584.9220) to help navigate your options

Analyzing Tax-Credits and Subsidies: Potential 30-85% Discount on Health Insurance

SimplyInsured’s analysis of health insurance 2014 shows selecting the appropriate plan could reduce health insurance premiums by 30-85%. The following chart show the appropriate plan decision based on average age and salary of your employees:

Small Group Health Insurance Best Options

Conclusions on maximizing discounts:
  • Businesses with average salaries over $50K/year or more than 25 employees should purchase a group plan - to achieve a 30% tax deduction
  • Businesses with employees over 50 should purchase subsidized individual plans – to achieve a 50-85% discount for employees over 50
  • Businesses with employees under 40 and average salaries over $30K/year should purchase a tax credit eligible group plan - to achieve a 30-65% discount through tax credits and deductions

The What Are the Health Insurance Plans and Discounts Available to My Startup?

As a reference guide, startups can choose from three types of health insurance plans:

1. Group Health Insurance Plan

  • Discounts: Premiums paid by the company are tax deductible, saving most companies 30-35% (depending on tax rate)
  • Eligibility: Any small business with 2 or more employees are eligible
  • Key Benefits: Wide selection of carriers and plan types

2. Tax Credit-Eligible Group Health Insurance Plan

  • Discounts: Companies can get up to 50% in tax credit for the premium paid as well as a tax deduction
  • Eligibility: Businesses with fewer than 25 FTEs and average annual salaries under $50K are eligible
  • Key Benefits: Employees can choose from between different carriers and coverage levels

3. Subsidized Individual Health Insurance Plan

  • Discounts: Individuals who earn less than $46K/year are eligible for a subsidized individual plan
  • Eligibility: The subsidy reduces premiums by 20-85%, depending on age and income
  • Key Benefits: No administrative management required

(Do you have other questions we didn’t answer? Leave us a comment or send us a note at hello@simplyinsured.com. Get a custom quote at www.simplyinsured.com.)

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20% Increase in Health Insurance Rates Predicted for People Under 40

November 19, 2013

As January 1 and the Affordable Care Act (Obamacare) approaches, we’re hearing the same question from small business owners: What’s happening to our health insurance rates? Here’s what to expect: Employees Under 40 Face At 20%+ Increases in Health Insurance Costs Prices from the Covered California exchange provide confirmation that health insurance premiums for younger [...]

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What Startups Need to Know about Obamacare

September 10, 2013

As 2014 approaches, major changes are coming with the Affordable Care Act (ACA) also knows as Obamacare. There are many more options for startups – both in terms of plans, payments, and public exchanges. Here’s what you really need to know in the coming months: What happens when the Exchanges open on October 1? State [...]

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What Startups Need To Know About Health Insurance in 2013

January 9, 2013

At SimplyInsured, we are avidly watching the changes in regulations and rates in the national health insurance market. As we head into 2013, we created a quick guide for startups summarizing the major changes to expect, and our advice on how to manage the changes. Changes to Health Insurance in 2013 Health Insurance Rates are [...]

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Health Insurance Network Types – PPO vs. HMO vs. Network vs. POS

December 15, 2012

One of the most common questions we get at SimplyInsured is “What is the difference between an HMO and a PPO?” We’ve created a simple table to help understand. First – some definitions: Network Type: A general label for the “level of restriction” of plan, and the level of coverage provided in-network and out-of-network. Common [...]

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HSA vs. HRA vs. FSA – Health Tax Benefits Explained

December 1, 2012

So many acronyms – so little time. Here’s your guide to getting tax benefits on your medical expenses. Here at SimplyInsured – we want to make your life easier. Health Savings Account (HSA) Health Reimbursement Account (HRA) Flexible Spending Account (FSA) Who can contribute Employer or Employee Employer only Employer or Employee Maximum yearly contribution [...]

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How to Choose Health Insurance – Startup Edition

November 19, 2012

So you’ve taken the plunge and started your own company, or joined a startup as an early employee. In addition to the amazing perks of bottomless Red Bull and Top Ramen – you realize you don’t have health insurance anymore. Given the likelihood of vitamin B12 deficiency and/or MSG-poisoning, you need coverage, and soon. But [...]

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