Should Your Small Business Have Health Benefits?
Health benefits through work are a perk offered by many employers to attract and retain quality employees, but the benefit of benefits goes far beyond that. Good help can be hard to find and when you do find staff that buy into the vision and mission of your company, you want to retain them and the value they add to your brand.
However, health benefits can be expensive. Many entrepreneurs and startups forgo benefits to save money. Yet at the same time, they know that in order to keep growing the company, they will have to offer health and dental benefits at some point.
Additionally, if an entrepreneur has left a corporate job to start his or her own company, they could be without health and dental benefits themselves, which does not bode well when an abscessed tooth, costly medication, or an ambulance ride disrupts the finances.
So, what’s a savvy small business owner to do?
Call a Life Insurance Broker for Small Business Health Benefits
A broker is different from an agent. A life insurance broker is like a freelancer. They assess the needs of their clients and then hunt for a solution among all the carriers in their province. An agent works for one company and can only sell the products of that one insurer.
Since brokers have access to more products, they can help you with some of the lesser known health benefit products for small companies, and compare prices to ensure you are getting the best plan for your budget.
What Kind of Health Benefits are Available for Small Businesses?
If your company has 3-5 employees, you may qualify for a pooled plan.
What a company pays for health benefits are largely determined by the makeup of the group (the people using the plan) and the history of the group (how the plan was used). New companies do not have large groups or historical data, and that affects the rates. However, with a pooled plan, that small company is considered to be part of a “pool” of other small companies with similar group demographics. This helps the underwriter estimate how the plan will be used, resulting in lower rates and renewals.
Very small companies, including solo-run businesses, can also access health benefits through a Health Spending Account, or HSA. This is a tax-advantaged strategy that allows you to deduct applicable medical costs for you and your family. HSAs are very handy as they do not require medical underwriting, but they can be confusing to navigate on your own. Your broker can help by directing you to companies that, for a small fee, will actively manage your HSA. Don’t worry about HSAs being a tax avoidance strategy – they are not. Canada Revenue Agency has a set of guidelines to ensure you understand their compliance requirements.
Why Should I Offer Health Benefits?
Running a small business goes far beyond simply have a great product or service. You and your staff need to show up every day healthy in mind and body to be productive and grow the business. Mental and physical health challenges lead to financial challenges that affect you, your staff and your business. With access to affordable medical services that fall outside of what is covered by the province (medication, dental, physical therapy, mental health services, etc.), you and your staff will be in top form and ready to keep the business going and growing.