Too Small For Benefits? Think Again: A Guide For Small Businesses & Entrepreneurs

Take a step back in time to when you first started your business, for some that will be a short step and for others a LONG step. Whether it was a short, or long, time ago we’ve all experienced the same fears. How do I make sure that I am covered, especially when moving from a corporate type job to being a business owner, and how do I make sure my team is covered? 

This is meant to be an easy to use guide that gives you the necessary information to simplify that complicated subject and give you specific steps for where you’re at today. 

Here’s five key things that apply to everyone:

1. Everyone needs to be prepared to have a budget in place for benefits. There are cost efficient ways to spend that budget, and when you’re starting out the budget will be way different than when you’re a long term established business. 
2. Not all insurance/health coverage is created equally. You want to make sure you’re working with someone who knows the ins and outs AND can keep the conversation in regular English so it’s not confusing. 
3. What a small business/solopreneur can do is very different from what larger companies can do, however, with some creative thinking and an open mind you can have an amazing benefits package no matter your size.
4. When you find someone to partner with for your benefits, make sure you uncover if they have the capability to do long term strategic planning, and what their reporting capabilities are once you’re a larger company. If you’re working with someone and they say all we can do is “shop it this year” when your rates increase, find someone new! (I say “when” rates increase as this is a reality in small businesses due to how insurance companies and the state insurance regulations work)
5. Considering how well most people understand their benefits, meaning most don’t understand them well at all, partner with someone who will build, educate, and support the benefits for you. You have a business to run, don’t add another thing to your plate that could and should be done by someone else.

Regardless of size, you’ll want to start with what kind of budget you have. If you’re just starting out and don’t have a budget, you’ll want to focus on building culture and partnering with others in your network for things you can do to create sticky employees. You can access my Linch Pin newsletter here for ideas.

Let’s start with 4 things to have that will address the “making sure I’m covered” fears that many of us have when it comes to benefits. Things like “What if I can’t work because I get injured or catastrophically sick?”, “How do I pay the hospital bill if I have to?”, or “How can I plan for retirement?”. You need to be prepared for a minimum budget of $100 per person per month if covering #1 type benefits, up to $800+ if you’re covering #1, 2, 3, and 4, type benefits. 

1. Income protection. Some type of coverage that will pay you your income if you’re unable to work. If you’re covering only yourself or if it’s for your team the type of coverage will vary. For example, as a business owner you can have a type of plan in place that will cover business expenses while you’re out. For employees you’ll want a regular short/long term disability plan.
2. Ability to get care when you need it. There’s multiple paths of how you can do this, of course full traditional health insurance is one of them, but there are also things like concierge medicine or direct primary care options available depending on your area. When considering concierge or direct primary care make sure you look at not only what the monthly/annual membership costs are but also what is included. For example, one office here in Arizona offers additional care services like minor surgeries, negotiated rates for x-ray’s, CT/MRI’s, and prescriptions for cost plus 10%. Dental and vision plans fall under this category also.
3. The big “What IF’s”… needing care for a cancer diagnosis, being hospitalized, or other BIG health thing. There’s two primary ways you can cover yourself/your team. Traditional Health Insurance, or something called a Health Share. (ok, stay with me and don’t go google this yet) Both of these will provide a way to make sure the doctors and hospitals get paid if something happens and that type of care is needed. The main difference is that health insurance will cover pre-existing conditions and a health share will not (with some exceptions). This is why you will see a major price difference when it comes to these options, with a health share being significantly lower in cost. A Health Share also requires you to live by a certain standard, think living a healthy lifestyle, and some require you to be part of a particular religion.
4. Retirement. We all hope to do this someday, right? There’s a wide variety of things to consider, from 401k’s and SEP’s, to Tax Free Retirement Accounts and Golden Handcuffs. Once you have 1-3 covered, start looking into these kinds of options to prepare for the future. Think of it like the ultimate form of self care, you’re working hard for a reason today, set yourself up for success so you don’t have to do it forever.

Now that we’ve talked about some of the key things to have in place, let’s talk about two other important things around health insurance. Ever thought something like this? “The reason costs go up every year is due to the cost of care right?” Nope. There’s a whole lot of things that factor into this, one of which is the medical loss ratio which you can learn about in my blog post here. 

Maybe you’ve experienced this. “I had to get care at the hospital and 2 years later they are sending me another bill!” This is due to something called “balance billing”. Basically it’s when the hospital sends the bill to the insurance company, the insurance company pays a certain amount, then the hospital sends you the bill for the rest. There’s some laws that have come about because of this practice so do your research before you pay the bill. I highly recommend a book called Never Pay The First Bill – Marshal Allen as a resource on the knowledge, strategy and how-to tactics you need.

I hope you find this article helpful and would love to meet you! Feel free to connect with me through KNOW members area, on social media, or you can set up time with me here to meet.