What employers & small businesses need to know when choosing health insurance in colorado

Providing health insurance for your employees may be required by law — depending on how many you have. However, even if you aren’t legally required to offer your workforce access to a health insurance policy, doing so can lead to happier, healthier, and more loyal employees. About 7% of Colorado residents don’t have access to health insurance, and you don’t want your employees to be a part of this group (United States Census Bureau). If you’re a benefits administrator and your business is located in the Centennial State, keep reading to learn how to find the best health insurance in Colorado. 

What is small business health insurance?

Protecting your team with tailored small business health insurance in Colorado is a great way to attract and retain top talent. Small business health insurance, also called group health insurance, can provide your employees the care they need to live healthy lives. To find the right plan for your business, you can use the Healthcare.gov search engine to find a Colorado health insurance policy that meets your unique needs. 

Health insurance basics

Before you dive into the Colorado health insurance marketplace, it’s helpful to understand some of the basics. Colorado employers must adhere to the same federal health insurance regulations as businesses across all 50 states. If you run a Colorado business with fewer than 50 employees who are classified as full-time or full-time equivalents, the Affordable Care Act doesn’t require that you provide them with employer-sponsored coverage. 

If, on the other hand, your business surpasses that limit, you have options for the type of health insurance coverage you need to offer. For example, you can offer a health reimbursement arrangement (HRA) or other health plans with tax-saving benefits. However, SHOP plans are only available for businesses with under 50 full-time or full-time equivalent employees. 

Finding the right small business health insurance plan

When it’s time to sit down and pick out a health insurance plan, you will need to consider a few different factors. Cost, network size, coverage options, and employee needs all play a role. Finding the right fit is a bit of a balancing act, but achievable. Spend some time shopping around with a handful of different providers to see which plans they have to meet your needs at a price that suits your budget. You will want to pay close attention to deductible, copay, and premium prices since those costs will greatly impact your employees. 

Regarding your costs, the good news is your business may be eligible for savings through the Small Business Health Care Tax Credit. With this tax credit, you can save between 35% (for non-profit employers) and 50% of the costs of employee premiums. To qualify for this handy tax credit, you need to enroll in a SHOP plan.

Other requirements your small business must meet include: 

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

• The average yearly salary of your employees is about $56,000 or less

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

• You offer SHOP coverage to all full-time employees (you’re not required to offer it to dependents or part-time employees working less than 30 hours per week to qualify for the tax credit)

Types of health insurance plans available

When looking for the perfect fit for your workforce, consider these benefit plans and savings accounts available in Colorado.

• Health Maintenance Organizations (HMOs): HMOs often offer lower out-of-pocket costs for your employees and focus on preventative health. However, due to a limited provider network, your employees will have less flexibility when choosing providers (Anthem)​.

• Preferred Provider Organizations (PPOs): With a PPO, your employees have more flexibility and can make an appointment with a specialist without referrals. As a tradeoff, they can expect higher premiums and out-of-pocket costs.

• Exclusive Provider Organizations (EPOs): An EOP offers lower premiums and a lot of flexibility, but outside of emergencies, no out-of-network costs are covered.

• High Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs): If you want your employees to have lower premiums (this can lead to high out-of-pocket costs before meeting the deductible), consider one of these plans. HSAs even come with some tax benefits. 

• Indemnity Plans: With an indemnity plan, your employees won’t need any referrals and can count on predictable costs for covered services. However, they will also face higher premiums and some work when it comes to securing reimbursements. 

• Individual Coverage Health Reimbursement Plan (ICHRA): An ICHRA is an employer-funded health benefit that reimburses employees for individual health insurance premiums and, optionally, other medical expenses. Unlike traditional group health plans, ICHRA allows employees to choose their own health insurance plans, offering flexibility and personalization.

Benefits of offering Health Insurance

• Easier hiring and retention: If you want to attract top talent, and keep them working for you, offering health insurance can help you accomplish those goals as 88% of employees feel that this is the most important benefit employers can provide (U.S. Chamber of Commerce)​. 

• Healthier and more productive employees: When your employees gain access to healthcare, they can pursue preventative care that helps them avoid developing serious health issues that can harm their productivity (Sobal Nationwide Health)​​.

• Potential tax savings: Small businesses with fewer than 25 employees and average wages under $56,000 may be eligible for the Small Business Health Care Tax Credit​​. HRA contributions are tax-deductible, lowering taxable income. 

How to enroll in small business health insurance in Colorado

To start the process of enrolling your small business insurance in Colorado, start by checking if your business is eligible (to start — you have no more than 50 employees). Once you're eligible, you can sign up immediately — there's no need to wait for an Open Enrollment Period, so you can start offering coverage anytime. To enroll, you can work with a SHOP-registered broker or agent who can help you find the best plan for your small business.

You can also pursue a plan with the help of Colorado Option. The Colorado Option is a program where all health insurance companies offer the same standardized plan, meaning the benefits are the same across all providers. This makes it easier to compare plans between different companies. Even though the Colorado Option plans have the same benefits, it's still important to compare them. Each company offers different premiums, so the cost will vary. If you have a small business with 2-100 employees, you can purchase a small group Colorado Option plan (Colorado Department of Regulatory Agencies). 

Resources and support

To find the right healthcare plan for your employees, you can start your search through the Small Business Health Options Program (SHOP) marketplace. From there, you can connect with Thatch to get a helping hand. Book a free demo with Thatch to see how we can provide healthcare solutions for your business while saving you and your employees money on healthcare spending.