What employers & small Businesses need to know when choosing health insurance in Arizona

The great state of Arizona is home to over 650,000 small businesses, which means many workers are relying on their small business employers for benefits. (U.S. Small Business Administration Office of Advocacy) If you want to offer Arizona health insurance to your employees, it can help to brush up on how small business health insurance works.

To find the best health insurance in Arizona for your small business, read on. 

What is small business health insurance?

Small business health insurance — frequently referred to as group health insurance — makes it possible for small businesses to give their employees access to a healthcare plan. To find a plan, you can turn to the Healthcare.gov search engine to narrow down your search to health insurance companies in Arizona. When you provide your employees with access to a healthcare plan, you are better equipped to attract and retain competitive talent. 

Health insurance basics

Currently, 99.5% of all businesses in the Grand Canyon State are small businesses. (U.S. Small Business Administration Office of Advocacy)

To better understand health insurance in Arizona, you need to master the basics. In Arizona, small businesses must follow specific regulations regarding employee health insurance. For businesses with fewer than 50 employees (including both full-time and full-time equivalent workers), there's no requirement to offer health insurance coverage. 

However, if your business is obligated to provide health insurance, the type of coverage can differ. Plan options may include health reimbursement arrangements (HRAs), Small Business Health Options Programs (SHOPs), health savings accounts, or health plans with tax advantages.

Finding the right small business health insurance plan

When seeking out a new healthcare plan for your employees, you need to balance quite a few different needs to find the perfect fit. Network size, employee needs, coverage options, deductibles, and premium amounts all come into play. Ideally, you will spend some time considering a few different providers and plans. That way, you can compare their coverage options and prices. 

To balance health insurance pricing with employee needs, you can potentially turn to the Small Business Health Care Tax Credit for help. With this tax credit, it is possible to receive as much as 35% (non-profit employers) to 50% of the costs of employee premiums. 

In order to receive this tax credit, your small business must enroll in a SHOP plan and adhere to the following requirements:

• You have fewer than 25 full-time equivalent (FTE) employees.

• The average salary of your employees is around $56,000 or less per year.

• You cover at least 50% of the premium costs for your full-time employees.

• You offer SHOP coverage to all full-time employees (though you're not required to offer it to dependents or part-time employees working less than 30 hours per week).

Types of Health Insurance Plans Available

What the right health insurance plan for your workforce can vary. These are a few of the main types of health insurance plans available in Arizona. 

• Health maintenance organizations (HMOs). HMOs offer coordinated care through a primary care provider (PCP) and focus on preventive health. They typically have lower out-of-pocket costs but a more limited provider network, requiring referrals for specialists.

• Preferred provider organizations (PPOs). PPOs provide greater flexibility in choosing healthcare providers, allowing visits to specialists without a referral and coverage for out-of-network care (at higher costs). These plans usually come with higher premiums and out-of-pocket expenses.

• Exclusive provider organizations (EPOs). EPOs offer lower premiums with flexibility within the network but do not provide coverage for out-of-network care, except in emergencies. This plan works well for those who don't need out-of-network options.

• High deductible health plans (HDHPs) and health savings accounts (HSAs). HDHPs have lower premiums and can be paired with HSAs, offering tax benefits and encouraging more cost-conscious healthcare decisions. However, they come with higher out-of-pocket costs until the deductible is met.

• Indemnity plans. Indemnity plans offer maximum flexibility in choosing providers, without requiring referrals. They have predictable costs for covered services but tend to come with higher premiums and additional administrative tasks for reimbursements.

How to enroll in small business health insurance in Arizona

Not having healthcare access can harm your employees’ health, but also can be detrimental to their finances. In Arizona, about 460,000 adults in Arizona have medical debt. (KFF)

So — how can you enroll your Arizona small business in a health insurance plan? To start, you must verify your business’s eligibility, which is limited to businesses with no more than 50 employees. 

Once you're eligible, you can enroll at any time, as there's no need to wait for an Open Enrollment Period. This flexibility allows you to begin offering health coverage to your employees whenever you’re ready. To enroll, you can work with a SHOP-registered broker or agent who can help you find the best health insurance options for your business.

Legal obligations of small business owners

As an Arizona business, you must adhere to all rules and regulations surrounding health insurance. One example of these rules is who you give healthcare access to. If you choose to offer plan access to any eligible employees, you must offer it to the rest of your eligible staff. Another example of these rules is that your business has to provide all eligible employees with a Summary of Benefits and Coverage (SBC) form. This form details important information about cost and coverage. (HealthCare.gov)

Staying compliant with any applicable health insurance laws is important if you want to avoid running into problems down the road. If you work in benefits administration, you should regularly review both federal and state regulations. 

Resources and support

In 2023, in Arizona, 9.9% of residents don’t have healthcare coverage. That means a staggering 713,800 individuals went without vital healthcare access. While this is an improvement from previous years (in 2013, 13.6% of Arizona residents were without healthcare coverage), there is still much room for improvement. Don’t let your employees be a part of this healthcare gap. (United States Census Bureau) (KFF) 

To make the process of offering healthcare to your employees easier, you can turn to Healthcare.gov for free, valuable resources about Small Business Health Options Program (SHOP) coverage options. You can also request a free demo with Thatch to find out how to save an average of $1,620 per employee each year. That way you can afford to provide your employees with the quality healthcare coverage they deserve at a price that works for your budget.