Small business medical insurance covers not just outpatient surgeries and emergency visits. Coverage also counts when considering physical area. If your employees live in a relatively local area than coverage considerations shouldn’t be that big of a factor. If employees are wide-spread or live across state (or even country) lines, then coverage might be a larger consideration. There are many options to choose from when it comes to health insurance before.

Now, companies may find that it is least expensive to offer a variety of options from just one or two main providers, as small business medical insurance providers are now offering discounts for the amount of people that are insured through them (the size of the insured group). Some of the employees, especially in small businesses, are related to the owner. In this case, discounted policies for relatives may be something worth looking into.

Maybe you want to look for policies that offer options for individuals especially when your employees are not related to you. It is also critical to know that in most states affordable coverage can be offered by businesses with as a few as two employees. It is also worth noting that many states consider a small business (for the purpose of seeking insurance coverage) one that has two to fifty employees. More than fifty employees may mean that your business is considered a mid-size business and may have different options when it comes to seeking health care coverage.

Adding dental and vision coverage to the health insurance plans, small business can earn discounts. In addition, other less traditional plans like AD&D (accidental death and dismemberment), life insurance, Workers Comp insurance and accident insurance can all offer savings if added to policies offered employees. Through internet you can find group health insurance quotes online, so that you can find sites that offer one click service and return rates from several different small business medical insurance providers.

It is not an intimidating option, especially if you manage your business in a right way, to find small business medical insurance coverage and for your business and employee, be smart in selecting a provider. Bundle your options by offering several plans and ad-on’s (like life insurance, vision, dental, etc.) and you may save even more. Lastly, small businesses shouldn’t view health insurance as an expensive cost of business, but rather as a way to earn and keep some of the best employees in their field.

A. Office overhead spend of key person disability insurance:
It is the insurance that reimburses the individual for actual business expenses incurred after the key person disability commences such as such as rent, staff salaries, business mortgage loan interest, depreciation or loan principal, and leased or rented equipment. Included would also be telephone, utilities, property taxes. and this kind of insurance generally have below figures
1. Waiting period: 30, 60, 90. 180 days are common.
2. Benefit in general is between $1,000 to $20,000+ and paid monthly.
3. Benefit period: 6 – 36 months.

B. Buy out key person disability insurance for Partnership and small corporation
As we mention in the other article, after a lengthy or permanent disability becomes apparent, buying the disabled party’s business interest becomes increasingly important. because
1.The business may lose money and suffer
2. The survivors face increased difficulties and frustration.
3. The financial position of the disabled person will deteriorate and both sides fear loss of income and assets.
4. In the event of disability without insurance, the buy-out is left open to the uncertainties of chance and negotiation. In such cases, the seller will usually be under a lot of stress/distress. The best solution is required that the parties enter into a buy-sell agreement prior to the disability of the key person and it is funded by criss-cross agreement. Insurance companies will issue both personal disability policies and buy-out insurance on the same life payable on the same disability.

C. Advantages of key person disability insurance
The amount of the benefit provided to the disabled key persons are generally advantageous to the business as well as to the insured.
1. Premium paid to the insurance company can be included in the budget as a fixed expense.
2. The insurance policy automatically provides the funds at the time of greatest need.
3. The premium paid in generally is cheaper than any of the alternatives.

D. The following conditions will usually apply when insurance is used to provide the funding for the buy-out:
1. Third party insurance (owned by a partner or shareholder) must be issued for the agreed upon price and ownership is not transferable.
2. Usually the company needs to be in business for two years or more and show signs of profitability.
3. Financial statements of the business must be submitted prior to issue of the insurance.
4. Normally this type of disability insurance buy-out agreements insurance have a long waiting period of one to two years. The benefit, if monthly, may have a payout period of up to five years.

E. Paid out
There are 2 types of paid out:
1. Monthly Pay-out: the pay-out is paid in monthly installments for the guaranteed term
2. Lump Sum: the pay-out is paid in one large lump sum payment.

I hope this information will help. If you need more information of the above subject, please visit my home page at:

Kyle J. Norton
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://businessinsurance23.blodspot.com

http://businessinsurance11.blodspot.com

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NAPEO, the National Association of Professional Employer Organizations, conducted an employee benefits survey in November, 2007 of its members’ clients to understand the concerns of small and medium-sized employers. NAPEO is an organization that represents firms, PEOs, which specialize in providing human resources outsourcing support and employee benefit packages to small and mid-sized employers nationwide. Mirroring the sentiment across the country, the trade association found that health care costs were their second-biggest worry after attracting workers.

The survey also revealed that more than half of the 365 small businesses surveyed said their premiums rose as much as 10 percent this year, and almost one in 10 told NAPEO they would dump their health coverage next year or are unsure about it. Many of these companies said they will pass at least some costs along to employees next year. One in five said they would raise co-payments for office visits or deductibles; one in four said they’d raise premiums.

California Employers Feel The Squeeze

The survey was conducted nationally, but employers in specific states, such as California, are being hit the hardest. Michael Holmes, Client Services Director of CPEhr, a Los Angeles-based

Professional Employer Organization, is not surprised. “This is another wake-up call,” says Holmes. “Soaring health insurance costs in California are hitting small businesses especially hard and these businesses employ the vast majority of workers. This is an extremely troubling development, not just for small businesses and their workers, but for the entire economy.”

A report recently released by the California State Library, entitled, “Ninety Years of Health Insurance Reform Efforts in California” by Michael Dimmitt, Ph.D of the California Research Bureau, reviews the history of health insurance in California dating back to 1918. It reveals some startling facts, and reasons for even greater concern in California:

• Between 1961 and 2002, health care costs increased almost without interruption. No effort to contain them has proven successful over the long term.

• Federal programs provide health care coverage to over 7.4 million Californians. If the programs were not in place, the number of uninsured in the state would double.

• More than 20 percent of Californians, 6.6 million people, currently lack health care coverage over the course of the year according to research conducted for the California Healthcare Foundation.

• Of those without health insurance, an estimated 75 percent are working people and their families.

• As a consequence of the growth in premiums, the number of people covered by health insurance in California decreased from 64.6 percent to 54.7 percent between 1987 and 2005.

Some employers are content to continue along the traditional health coverage path for their staff. While premiums rise, most just consider it a cost of doing business. However, many California employers are now turning to the PEOs to provide relief for their employee insurance woes.

What is a Professional Employer Organization?

Professional employer organizations, or PEOs, pool thousands of employees under one roof and provide cost effective management of small employers’ health insurance plans. Additionally, PEOs help small businesses outsource their time-consuming human resources chores, such as payroll, HR policies and risk management, so owners can focus on making a profit. The PEO acts like an offsite human resource department, so even small employers can gain access to expertise typically reserved for larger, more established organizations. Particularly in California, where complex employment rules and difficult insurance guidelines weigh heavily on small businesses, it is highly beneficial for small California employers to connect with an expert PEO in the state, such as CPEhr.

Like most PEOs, CPEhr creates a “co-employment” relationship with its clients, thereby sharing the risks and responsibilities of being an employer. CPEhr assumes the role of the Administrative Employer, whereby it pays the employees, files payroll taxes, provides health insurance, issues the workers’ compensation insurance, and manages most aspects of employment. The client maintains the role as the Administrative Employer and continues to manage and oversee all day-to-day functions relating to their internal operations. This includes hiring, firing, establishing wages, and directing the workforce.

Through this co-employment relationship, small organizations access the economies of scale enjoyed by large corporations. CPEhr’s clients can offer premium benefit packages and retirement plans to their staff, typically provided by their larger competitors. They can maintain a simple in-house HR infrastructure or none at all by relying on the PEO. The client also can reduce hiring overhead. Costs related to monitoring of, and compliance with, employment laws are reduced, as are the often significant costs of failure to comply with such laws. In addition, the PEO provides time savings by handling routine and redundant tasks for its clients. This enables the business owner to focus on the company’s core competency and grow its bottom line.

Creative and Affordable Insurance Options

According to NAPEO, the PEO industry grew over 15% in 2007, to $61 billion in gross revenues. PEOs currently provide access to employee benefits for 2-3 million working Americans. This number continues to grow as the economies of scale offered by PEOs make them an attractive solution for small employers looking to offer a wider range of benefits to their staff, without the need to shop, administer or oversee these plans.

CPEhr maintains a fully staffed employee benefits department which is focused on finding cost effective and comprehensive benefits to make available to its clients. Because CPEhr has the manpower to tackle this daunting task, the small employer merely has to join the PEO program, and enjoy access to the benefits without the responsibility to administer the plans.

Like most employers, CPEhr offers its clients standard major medical insurances with the large insurance carriers. However, due to the size of the pool of employees, CPEhr enjoys a stronger relationship with the insurance companies which enables them to offer a wider range of plans and coverage options, with greater flexibility on enrollments and improved customer service. While a small business independently may secure a benefit plan with one or two co-pay options, a CPEhr offers as many as 8-10 options for the same employer.

In addition to major medical, a wide range of supplemental benefits, such as dental, vision, life, and disability insurances are available. CPEhr also extends its benefit offering to include additional employee programs such as such as travel, cancer and alternative health care insurances, credit unions, Flexible Spending Accounts, and robust 401 (k) plans. The Small Business Administration estimates that merely nineteen percent of employees working in a small business have access to a 401 (k). That number skyrockets to an estimated 95% in a PEO arrangement.

While it is obvious that not every small business will need, or even want, to offer this wide range of benefits to its staff, it should be comforting for them to know that alternatives exist. At the least, the small employer should recognize the extraordinary opportunity PEOs offer to help level the playing field in the complex and tough employee benefits environment.

Conclusion

Rising health insurance premiums, complex employment and benefit administration, and a weak economy are all making the task of procuring affordable, manageable health insurance more daunting for the typical small employer. Particularly in California, where 75% of the uninsured population is in the workforce, these challenges are reaching critical limits. More and more employers are turning towards alternative health insurance solutions, such as joining a PEO for their employee benefit coverages. One such firm, CPEhr, is a leader in the California marketplace and can provide these solutions efficiently and cost effectively for state-based businesses.

About CPEhr

Founded in 1982, CPEhr is one of the largest, privately owned human resources and professional employer outsourcing (PEO) firms in California. With 25 years experience in the California market, CPEhr has an advantage in its knowledge of statewide employment challenges. CPEhr provides a personalized service that extends to 35 states. CPEhr offers an array of integrated human resources services that includes: Employee administration, human resources and labor law compliance, payroll and tax administration, benefits administration and compliance, workers’ compensation administration, risk management, training and development and recruitment.