In this Colorado small business health insurance guide, we’re going to explain the basics of getting a group plan for your small company. Then we’ll answer some of the most frequently asked questions about CO group insurance.
Over the last few years, few things have changed as rapidly as the way that people think about their employment. The shift to remote and hybrid work structures brought about a wave of transfers and resignations, as workers scramble to find employment opportunities that are a good match for the digital era.
If this employment shake-up has taught us anything, it’s that small business health insurance plans are more important than ever for companies looking to attract, retain, and develop their most valuable employees.
In This Colorado Small Business Health Insurance Guide:
- Intro: Why Colorado small business owners should consider group health insurance plans, (even if they’re not required to).
- The Rules: What you need to know about 2024 business health insurance rules in Colorado.
- The Options: A look at all of the health insurance options for small business owners, both in CO and across the country.
- FAQ: Frequently asked questions about Colorado small group health insurance, enrollment deadlines, contribution requirements, employee minimums, and more.
Intro: Why Should Small Businesses Consider Health Insurance?
If your business has 50 or fewer employees, then there is no penalty for not offering a group health insurance plan. But savvy small business owners know that there are a number of bottom-line benefits that come with group insurance. Together, these benefits make it more than worth the cost.
According to a recent survey by the Kaiser Foundation, group health insurance plans are directly linked to:
- Fewer sick days used annually
- Higher job satisfaction figures
- Reduced employee turnover
- Employer-reported productivity gains
Combine these findings with the Small Business Healthcare Tax Credit, and you have a benefit option that is bringing more wealth into the company than it is taking out.
Q: How Much Do the Plans Cost?
Any Colorado employer with 25 or fewer full-time employees that offers group coverage can get a tax credit that is worth up to 50% of that company’s premium expenses. In addition, these business owners can deduct 100% of all health insurance expenses as ordinary business expenses.
Q: How Do You Qualify for the Small Business Health Insurance Tax Credit?
Small business owners can qualify for the tax credit if they meet all of the following requirements:
- The business has 25 or fewer full-time equivalent employees
- The average salary for these employees is less than $56,000 per year
- Your contribution to employee premiums totals at least 50%
- Coverage is offered through the Small Business Healthcare Options (SHOP) program. (If no SHOP plans are available in your business’ location, the IRS will still allow you to claim the credit).
- You offer coverage to all of your full-time employees. (There is no obligation to offer the plan to dependents or part-time employees).
Note: Business owners can only claim the Small Business Health Care tax Credit for 2 consecutive years.
The Rules: 2024 Colorado Business Insurance Requirements
The Affordable Care Act (ACA) defines and enforces a number of rules about small business health insurance. The biggest requirement is that businesses with 50 or more employers provide an affordable group health insurance plan to their employees. This plan must provide the 10 essential ACA benefits, and the business must pay a contribution minimum of 50% for each employee.
The State of Colorado does not enforce employers to offer health insurance. The federal penalty still applies for large businesses who do not offer insurance.
However, Colorado does have a list of state-specific health insurance mandates enforced by the Colorado Division of Insurance (DOI). These mandates state that all individual and group health insurance plans in the state must offer coverage for specific things that might not be mentioned by the ACA.
Some of the topics regulated by the DOI include:
- Coverage while participating in a clinical trial
- Diabetes equipment, supplies, education, and self-management
- Maternity coverage
- Anticancer medications
- Preventive healthcare services
- Prosthetic devices
- Reproductive health
The Options: The Available Health Insurance Options for Small Business Owners in Colorado
1.) No Health Plan
Businesses that have fewer than 50 employees are not required to offer group health insurance. Larger companies, on the other hand, have to face a significant tax penalty if they don’t.
As a small business owner, you can choose whether or not to offer coverage. But before you choose this option, take the time to review the significant benefits that come with offering at least some form of health plan.
2.) Employer-Sponsored Group Health Insurance
Group plans can keep your employees healthy, happy, and effectively producing for your company. A good health benefit plan is also a great way to make sure that your key employees are going to stick around, while also attracting top talent to your organization.
Group plans come in a number of forms. Here are the most common:
- HMO / Health Maintenance Plans: Insurance plans that work exclusively with contracted providers. With HMOs, employees must use in-network care to be covered (with some rare and emergency exceptions).
- PPO / Preferred Provider Plan: These group plans have more choice to use out-of-network care. Out of network care might come at a higher rate, but it’s not as restrictive as HMOs.
- POS / Point of Service Plan: These plans are not as common as HMOs and PPOs. POS plans combine elements of both HMOs and PPOs, and require the use of a primary care doctor for all referrals.
Popular Colorado Group Health Insurance Companies include:
- Cigna: Lot’s of plan options, including the employee Indemnity Plan that allows employees to use specialists without needing a referral.
- Friday Health Plans: For individuals and businesses in Denver, Colorado Springs, NE Colorado, and the San Luis Valley
- Anthem BlueCross BlueShield: With a total provider network that includes 90% of all the nations doctors and hospitals
Depending on which country your business operates in, more insurance companies could be available for you to choose from. If you’d like to see what’s available specifically to you, visit our main page and enter your zipcode.
3.) Low-Cost Insurance Alternatives, like Medical Cost Sharing Programs (Healthshare for Business)
Until recently, low-cost healthcare cost sharing programs were built only for individuals. Today, health sharing plans are being custom-tailored to small businesses, giving owners and managers a way to provide a valuable employment benefit without spending too much.
Small business healthshare plans have some big advantages over traditional insurance, including:
- More affordable that group insurance by as much as 50%
- Requires no minimum employer contribution
- Gives employees a greater freedom of choice (no provider networks)
MPB Health is one business healthshare option that Colorado employers should consider. Some MPB plans can be configured to work with Health Savings Accounts (HSAs), and others can be paired with popular Direct Primary Care (DPC) memberships.
Colorado Small Business Health Insurance FAQ [Frequently Asked Questions]
Q: Do I need to offer health insurance to my employees?
If your business has more than 50 employees, then you can face a significant tax penalty for not offering a group insurance plan. If you have a small business with 50 or fewer employees, there is no requirement to offer insurance.
Q: What is the minimum number of employees for group health insurance?
In almost all U.S. states, businesses must have at least 2 employees to offer a group health insurance policy. There is also a 70% participation requirement regardless of company size.
Q: Who is eligible for group insurance?
Companies have some discretion on which employees are eligible for insurance, but there are restrictions. For example, if an employer offers eligibility to one full-time employee, then they are required to offer eligibility to all full-time employees.
Employers are not always required to offer eligibility to part-time employees or dependents, but has the option to.
Q: Do Colorado employers have to provide health insurance?
Colorado requires that all businesses with more than 50 employees provide some form of qualified health insurance benefit. Businesses of this size who do not offer health insurance may face large tax penalties.
How Can I Lower My Small Business Health Insurance Costs?
If your small business is ready to add health insurance or health sharing to your employee benefits package, we can help. Our Personal Benefits Managers are well-versed in all the business health insurance requirements in Colorado, as well as the federal rules that need to be considered.
Your free small business health insurance benefit consultation is waiting; Click here to get started.
Christine Corsini is a health insurance and medical cost sharing expert, and a Personal Benefits Manager at ColoHealth. Her goal is to help people embrace life’s amazing possibilities by staying healthy, saving money, and making the best decisions when it comes to healthcare.