Health Insurance

A surprising number of small business people don't have health insurance, either because they don't know where to look for coverage, or can't afford it once they find it. This is a mistake, since an illness or accident can devastate your business if you don't have proper coverage.

When you're looking for health insurance, either an individual or a group plan, keep the following in mind:

• Look for guaranteed renewal. Make sure your contract has the words "not cancelable by company" or "guaranteed renewable" in it.
• You want a company that pays benefits based on customary costs, not by a fixed schedule. Strict limits on what an insurer will pay may result in medical bills beyond your deductible. Also, look out for coverage that only pays for in-hospital care, or leaves out a long list of medical treatments.
• Many business or industry associations offer members the option of being part of a group insurance plan. This can be a good way to go, but these policies are also often overpriced, so don't automatically assume that your professional association is giving you the best deal.
• HMOs and other managed care companies aren't always the least expensive option either, because they historically have been more liberal about who they insure; the cost of covering these people may be passed on to you.
• You may choose to buy insurance through a PPO, an organization which allows you to choose a doctor from a list of providers or go outside of its network if you pay a deductible. If you buy coverage through a PPO, be sure to check for hidden expenses such as "hospital admission expense."

To Small Business Insurance Primer