Navigating Virginia health insurance for small business can feel overwhelming, but finding the right plan at the right price is key to attracting talent and protecting your bottom line.
If you’re an employer searching for Virginia small business health insurance, you’ve come to the right place!
In this guide we’ll explore plan types, costs, and provide free assistance to benefits without breaking the bank.
Whether you’re a startup with just 2 employees or an established business, keep scrolling and learn how to effectively shop for small business health insurance in Virginia.
We’ll discuss SHOP marketplace health plans, fully-insured plans vs level-funded plans and how much small business health insurance costs in Virginia.
Let’s begin!
Questions? As an independent agency, we help individuals, families & small businesses find affordable health coverage and benefits.
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Health Insurance for Small Business in Virginia
Securing affordable health insurance for your small business involves understanding several crucial requirements. Here’s a breakdown of the key factors to consider:
- Minimum Employee Numbers:
- Most insurance carriers require a minimum of two full-time W-2 employees to qualify for small group health insurance.
- Full-time employees are those that work 30 or more hours per week.
- While the business owner can be counted as one employee, the second employee should be unrelated (not a spouse) to prevent the policy from being a family plan.
- Defining Employees (IRS Standards):
- The IRS generally defines employees as those who performs services, if the business can control what will be done and how it will be done.
- This distinction is critical for determining eligibility for group health insurance, as self-employed individuals typically pursue individual marketplace health plans.
- Employer Contribution:
- Insurers often mandate that employers contribute a minimum percentage toward employee premiums. This contribution requirement can vary, but is typically 50%.
You’ll need to confirm the specific standards with your chosen insurance provider or broker.
- Insurers often mandate that employers contribute a minimum percentage toward employee premiums. This contribution requirement can vary, but is typically 50%.
- Regulatory Compliance:
- Small businesses must adhere to both federal and Virginia regulations, such as the Affordable Care Act (ACA), workers’ compensation and any applicable state laws.
- Consulting with a knowledgeable insurance broker can significantly streamline the compliance process.
Virginia Small Business Health Insurance Options
You have several options for small business health insurance in Virginia.
First, start by visiting Virginia’s Insurance Marketplace to learn about SHOP Plans.
SHOP provides small business employers access to ACA Marketplace health plans designed for their needs.
These plans are fully insured, catering to the diverse health needs of your employees.
Offering SHOP plans makes you eligible for the Small Business Health Care Tax Credit, which can cover up to 50% of your premium costs.
For tax questions be sure to consult with a certified tax professional.
The downside is not all carriers participate in SHOP which means limited coverage in Virginia.
You can also find a licensed, certified broker specializing in small business health insurance in Virginia to guide you through the process at no additional cost.
Visit: Virginia’s Insurance Marketplace for Small Business >>
Understanding Fully-Insured vs. Level-Funded
The challenge of rising healthcare costs is a reality for businesses of all sizes, and Virginia’s small businesses are no exception.
To effectively manage these costs while providing valuable benefits, understanding your funding options is crucial.
We touched on SHOP marketplace health plans. Outside of the exchange there are two primary models: fully-insured and level-funded plans.
Choosing the right plan can significantly impact both your employee’s well-being and your bottom line.
We’re here to help you navigate these options, to select the benefits solution that aligns with your team’s needs and your budget.
Fully-Insured Plans
Think of fully-insured plans as “traditional” health insurance where your business pays a fixed monthly premium to an insurance carrier.
SHOP Marketplace plans are fully-insured.
The carrier assumes all financial risk of your employees’ healthcare costs.
Your group is also community rated, meaning individual employee health conditions are not directly factored into your premium calculations.
Employees in good health are grouped with employees that are not so healthy to determine price.
This has been the most common arrangement, but has also been the most expensive option.
How it works: Fixed monthly premium; insurer handles all claim risk.
- Pros:
- Predictable costs
- ACA compliant (pre-existing conditions OK)
- Cons:
- Higher premiums
- Limited network flexibility
- No end of year rebates
- Ideal for: Businesses willing to pay more for stability, especially with diverse employee health profiles.
Level-Funded Plans
Level-funded plans are increasingly popular and offer a hybrid approach to traditional plans where you share some of the risks which lowers overall costs.
For small businesses with a predominantly healthy workforce, level-funded plans can provide optimal cost efficiency, though they do require a review of medical history by the carrier for accurate quoting.
Contact us to explore our level-funded options:
- Fixed monthly premiums
- Stop-loss limits exposure & liability
- Potential for rebates based on annual claims
- Generally less expensive than fully-insured plans
How it works: Fixed monthly payment covers projected claims, fees, and stop-loss insurance; requires employee health history.
- Pros:
- Potentially lower costs
- Greater plan flexibility. (in-network & out-of-network)
- Limited liability
- Potential for rebates
- Cons:
- Employee health history required.
- Specific plan start dates.
- Ideal for: Businesses with healthier employee populations seeking cost savings.
How Much Does Virginia Small Business Health Insurance Cost?
As mentioned earlier, insurance carriers typically offer lower rates as headcount rises.
The cost of health insurance for Virginia small businesses varies significantly based on group size, plan type, and employee demographics.
As group size increases, insurance carriers typically offer lower per-employee rates. A business with 2-10 employees will see different pricing than one with 50 employees.
While smaller groups may be able to find more cost-effective options on the individual marketplace, potentially utilizing reimbursement arrangements for employee benefits.
However, many business owners prefer a group health, dental & vision to attract and retain talent.
To illustrate, let’s compare fully-insured vs level-funded plan options for a 5 person company:
- Fully-Insured
- In Virginia, the average annual premium per employee in 2023 was approximately $8,100, or $675 per month.
- Based on this figure, a fully-insured group plan for 5 full-time employees would cost around $3,000-$3,500 per month.
- Level-Funded
- These plans, which involve shared risk and underwriting based on employee medical history (typically the past 5 years), can offer potential cost savings.
- Key advantages include:
- Potential Refunds: If claims are lower than projected.
- Greater Plan Flexibility: Allowing for tailored benefits.
- Risk Mitigation: Through stop-loss insurance.
- Underwriting: Medical history review is required, impacting final pricing.
To illustrate the potential savings, let’s look at one of our recent level-funded quotes.
We presented three plans for a company with 5 employees showing a total monthly costs ranging $2,000-$2,500, or $400-$500 per employee.
These figures are estimates for medical only. Dental & vision are additional.
Contact us for a free custom quote tailored to your business’s specific needs and employee demographics.
Why Choose a Virginia Health Insurance Broker for Your Small Business?
Offering competitive employee benefits, including quality health insurance, is essential for attracting and retaining top talent in Virginia.
However, navigating the complexities of Virginia small group health insurance can be challenging, especially for businesses with 2-20 employees.
A Virginia health insurance broker can simplify this process, providing expert guidance and access to a wide range of plans, at no extra cost to you.
Key Benefits of Using a Virginia Health Insurance Broker
We offer a broad selection of Virginia employer health insurance plans from top carriers, including:
- Anthem
- Aetna
- Sentara
- UnitedHealthcare
- Access to Multiple Providers: Brokers provide a comprehensive view of the market, enabling easy comparison of rates and benefits.
- Expert Guidance: Brokers simplify complex insurance terminology and ensure compliance, saving you time and preventing costly errors.
- Tailored Solutions: Brokers understand your unique business needs, identifying cost-effective plans that align with your budget.
- Ongoing Support: Brokers offer continuous support for claims, renewals, and questions, reducing administrative burdens.
Is There a Cost to Working with a Health Insurance Broker?
No. Partnering with a broker is a cost-effective way to secure the best health insurance for your business.
Here’s why:
- Carrier Compensation: Brokers are usually compensated by the insurance carriers, not by you. This compensation is factored into the plan’s cost regardless of whether you use a broker.
- Regulated Rates: Insurance rates are set by carriers and regulated by the state. Brokers cannot alter these rates, ensuring you pay the same premiums as you would directly from the insurer.
How to Find a Virginia Health Insurance Broker
A great starting point is Virginia’s Insurance Marketplace (marketplace.virginia.gov).
This state-based exchange lists vetted and certified brokers qualified to assist with individual, family, and small group health plans defined as less than 50 employees.
While some agencies may serve multiple states, consider choosing a broker with specific expertise in the Virginia market. Their knowledge of local regulations and carrier networks can be invaluable.
While we offer assistance to individuals and families in ten states: (list) our small group team specializes in helping helps businesses in Virginia along with Georgia, Maryland & Pennsylvania.
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Licensed health & life insurance broker helping individuals, families and small business owners get better access to affordable health benefits.
His background in marketing research, insurance and retirement plans gives him a unique perspective to help others plan for the future and improve their physical, mental and financial well-being.