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Starting Your Small Business: Health Insurance Basics


Small business health insurance needs are different from your personal health insurance needs. Purchasing health insurance coverage for yourself if you own a small business requires additional or more extensive coverage than basic individual coverage. Below is information on health insurance for a new business owner.

General Health Insurance

Health insurance companies provide coverage at free or reduced costs to policy owners. For these services, policy owners are required to pay a monthly fee and meet a deductible prior to the credit company beginning to pay for health services and may also need to pay a co-payment for the services. The amount of coverage the credit company provides and the extent of your coverage depends on the policy you purchase. Each company offers several different policies to choose from. You can choose a policy that covers only yourself or a policy that covers other individuals in your family. Prior to choosing a policy, obtain information for comparison from many different companies.

Individual Coverage, Plus

For a small business with no employees other than yourself, the coverage you need will differ slightly from the coverage you would need for a purely individual policy. You might want to include family members on the policy. This would require you to include the coverage necessary for the other individuals on the policy.

However, you may also need to enhance the coverage you purchase to make sure it will provide for your medical needs and allow you to get back to work as soon as possible. This may mean that you will have to purchase a higher amount of coverage or more extensive coverage. The main thing to remember is that as a small business owner, your presence is required for the business to thrive. You cannot be hampered by extensive medical bills or out of commission for very long because this may hamper your businesses' operations.

Additional Coverage

Many companies offer additional coverage that could assist a small business owner. Additional coverage includes extended coverage levels or payments to cover you in case you cannot return to work immediately. These additional types of coverage could be essential in case you should be seriously or fatally injured; payments could help you run your business while injured or help your family cover costs in case you are unable to return to work.

Group Health Insurance Plans

Group health insurance plans cover more people than just you and often cost less, but are only available to businesses. If you own a small business, you may be able to set up a group health insurance plan that covers yourself and your family, but is subsidized by your business. Because they are cheaper, offer expanded coverage and cannot be denied to anyone in the group, including future or current employees and family members, this may be the best option for a small business owner. Inquire into whether a health insurance company offers this type of policy and the requirements for the business to set it up.

Health Insurance and Taxes

Your health insurance costs, including any co-payments or deductible payments, may be tax deductible. Prior to purchasing your health insurance, investigate which expenses would be deductible and how much you may save at the end of the year.

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