Small Business

Small Business

Buy / Sell Agreements – When taking out a buy/sell life insurance agreement, business partners purchase life insurance policies on the lives on each co-owner but not on themselves. If a co-owner was to die, the other co-owner(s) will be paid a lump-sum benefit that is then paid to the deceased’s surviving family members. This payment allows the owner(s) to acquire the share of business from the deceased while compensating the grieving family members for their loss.

Key Person Insurance – In many businesses we rely individuals that are essential to the success of a business. In such instances, the loss of certain Key People through their death could create a hardship for a lot of business owners. With Life Insurance you must have what is called insurable interest and a Key Person within your small business meets this requirement of insurable interest. Purchasing a Key Person Insurance policy can give your company the resources it needs to regroup after a critical employee’s premature death.

Disability Insurance – There are different types of Disability Insurance. Usually Short-term Disability and Long-term Disability.  Short-Term Disability policies have a waiting period of 0 to 14 days with a maximum benefit period of no longer than two years. Long-Term Disability policies have a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life. On the other hand, getting disability insurance as a small-business owner  is slightly more complicated than getting it as an employee, but it could be a lifeline. These forms of insurance are intended to replace a person’s income.

But what if you have Rent, Utilities, Employee Salaries, Equipment, Property Taxes, Accounting Fees, Loans and etc… For that, you’ll need a separate disability insurance product called Business Overhead Expense (BOE) Disability Insurance, which protects your business’s expenses.

Health Insurance Options Based On Business Size

Sole Proprietor – If you are a individual business owner, then you’ll probably need to purchase individual health insurance. You can search for and choose a Qualified Health Plan (QHP) under the Affordable Care Act (ACA) on Healthcare.gov during Open Enrollment from November – December 15th unless you have a Special Election Period (SEP). 

As an individual business owner, you only need to satisfy your own health related concerns along with your dependents, if any. Keep in mind that there are other options available to you as well with much lower premiums than ACA plans such as: Short-term Medical Plans (STM), Ministry Plans, Hospital Indemnity Plans and more…

Small Business Owner (2-7 Employees) – Having 2-7 employees gives the small business owner a few other options for them and their employees.  1. Your first option is for you and your employees to purchase a QHP ACA plan through the Marketplace. 2. You can purchase a “Fully Funded” healthcare plan through a major carrier such as United Healthcare, Humana, BCBS, Aetna and etc… These small group plans are usually guaranteed issued without any underwriting and offer PPO’s, POS’s & HMO’s with different deductibles and coverage options.

If offering a small group plan isn’t within your business budget, you may want to consider offering your employees Voluntary Benefits. Voluntary Benefits are such things as Dental Plans, Vision Plans, Accident Plans, Critical Illness Plans, Cancer Plans, Term Life Policies & Disability Plans. With a minimum enrollment (usually 5 employees), a small business owners can offer their employees these highly desired policies. Premiums are employee-paid; there’s no effect on the employers bottom line. Supplemental employee benefits help you recruit and retain top talent and help you become a choice employer.

Small Business Owner (8-50 Employees) – As a Small Business owner with 8-50 employees, you have all the options above as the business owner with 2-7 employees, but if you are willing to go through underwriting and have a younger or healthy group of employees, you may want to consider a Level Funded plan. 

Level Funded Health Plans are also known as a partially self-funded plans. This type of health insurance plan that combines the cost savings and customization of self-funding with the financial safety net and the predictability of fully funded plans. These costs are fixed and charged per employee. The sweet spot to consider a Level Funded plan is usually begins with 10 employees. Depending on age and health, you may well want to consider a level-funded plan as it could save you 30 percent or more on health care costs for any small business.

Remember to always keep in mind the health care needs of you and your employees. Once you figure out your annual budget, there is most likely something you can offer to make your business an even better place to be employed!

 

Dave Cook Level Funded | Small Business Health | Buy Sell Agreements | Voluntary Benefits