Medical Insurance For Small Business | Keeping Health A Priority



Blog, Medical
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Small business owners have a lot to worry about when it comes to their business — from paying suppliers on time, to paying for sometimes-high business insurance costs, and chasing payments from debtors, to name a few.

Business health insurance should not be one of these worries. Keep reading to discover how you can provide the best medical insurance for your small business.

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What Is Business Medical Insurance?

Simply put, business medical insurance covers the cost of your medical bills should you fall ill or are injured. It’s important to make a distinction between medical insurance and medical aid. The two terms are often used interchangeably but they mean different things.

Medical insurance typically covers bills for medical treatment that are not covered by your medical aid. Think of out-of-hospital expenses such as the cost for prescribed medications, consultations with your general practitioner, basic dental cover, or the cost to see an optometrist. Medical insurance products are generally more affordable than medical aid and they are not governed by medical aid regulations.

Medical aid, on the other hand, covers Prescribed Minimum Benefits (PMBs) per the Medical Schemes Act. According to the Act, costs related to the diagnosis, treatment, and care of the following have to be covered by medical schemes:

  • Emergency medical conditions;
  • Medical conditions, limited to a set of 271; and
  • 26 chronic conditions.

Doctors looking at patient below before performing surgery.

The limited set of 271 medical conditions are defined in the Diagnosis Treatment Pairs, while the 26 chronic conditions are defined in the Chronic Disease List of the Medical Schemes Act. Medical aid is typically more costly than medical insurance.

Now that the differences between the two have been established, let’s take a look at why small business owners can benefit from business health insurance.

Importance And Benefits of Health Insurance For a Small Business

Medical insurance for small businesses and health insurance for business owners are incredibly important. Not only is it important to have sufficient medical care for one’s peace of mind, but medical insurance also takes care of you (and your employees) in medical emergencies.

Heart sign made by doctor wearing surgical gloves.

Improve Employee Loyalty and Retention

Providing medical insurance for your employees can help them feel valued and lets you retain top talent. Employees who feel valued are more likely to stay longer at a company than those who don’t feel valued. Employee turnover costs are high, and can be a significant cost for small businesses when seeking new talent.

Improve Your Hiring And Recruitment Processes

Speaking of new talent, having small business health insurance that provides cover to your employees can attract top talent. This means your company is considered an employer of choice.

When searching for employment, health benefits are an important consideration for job seekers. Your human resources department can look at improving your hiring strategy by highlighting medical employee benefits. This will help your business stand out from competitors.

Healthier And More Productive Employees

It goes without saying that having quality medical cover can improve your health, not to mention that of your employees. When employees take advantage of medical insurance cover and see mental health care professionals, for example, they have better (mental) health.

This can also improve their productivity at work. Healthier employees are more productive than employees that aren’t healthy.

Improve Company Culture

By having medical insurance that can be accessed by employees, employees are more likely to feel valued by the business, which encourages a positive work culture and environment.

Happy male and female employees at work.

Possible Tax Incentives

Businesses (and small businesses, in particular) can benefit from insurance deductions in terms of section 11(w) of the Income Tax Act. These deductions are based on the medical insurance policy premiums paid. They will lower the taxable income, and hence the tax which the business will be liable to pay to SARS.

Improving Employees’ Access to Health Care

This helps to make medical coverage more accessible and affordable to employees, as some may not have had access to it otherwise. For some employees, medical insurance is out of reach as they cannot afford it on their own.

Possible Lower Monthly Premiums

Group health insurance for a small business can prove to be beneficial for small business owners because it has a cheaper cost-per-person compared to individual medical insurance cover. This helps businesses save costs in the long run.

Things To Consider When Choosing Business Health Insurance

Like any type of business insurance, there are several considerations to make when choosing medical insurance for your small business. Here are a few things to keep in mind:

  1. The size of your business
  2. The number of employees you have
  3. The location of your business
  4. The type of business you have
  5. Your business’s claim history
  6. The medical history of you and your employees
  7. What resources you can commit to obtaining medical insurance
  8. Your group health insurance provider

Man looking up and thinking.

The Size Of Your Business

The cost and comprehensiveness of the medical insurance you choose will be influenced by the size of your business. A large business with a much larger operation will probably have a higher medical insurance premium than a local small business.

The Number Of Employees You Have

Having a high number of people employed by your small business will most likely result in a higher medical insurance premium. On average, the cost of group health insurance is more affordable than individual medical insurance, but adding more people under group cover is likely to increase the cost thereof.

The Location Of Your Business

Because medical insurance provides benefits that are subject to strict network-provider rules, your medical insurance provider may state that you and your employees may only go to providers in your area.

This may not be an issue if all your employees live close to where your business is located. However, you may find yourself dealing with an unintended consequence here.

Your group health care may come with a restricted list of network-providers. Employees who live far away from the location of your business may have to incur travel costs to see medical network-providers. Therefore, the provision of group health care that was intended to make medical care accessible and affordable for employees may prove to be costly for them instead.

Lady stressed out with head in hands.

The Type Of Business You Have

If your small business is a local dental practice, your medical insurance premiums will most likely be higher than that of a local phone repair shop, for example. Businesses in the medical field typically pay higher medical insurance premiums due to the nature of the business and the risk involved.

Your Business’s Claim History

Like other insurance policies, the number of medical insurance claims you’ve made in the past can affect your medical insurance policy premiums. This is because businesses with many past medical insurance claims are typically seen as higher risk.

The Medical History Of You and Your Employees

Some medical insurance providers may exclude certain health conditions, but this depends on the provider and comprehensiveness of the cover you get. Ensure you read the policy document carefully and ask questions before you sign anything.

What Resources You Can Commit To Obtaining Medical Insurance

One of the top reasons small businesses fail is due to a lack of finances, particularly cash flow. As a small business owner you’ll have to carefully consider whether you have the financial resources to obtain medical insurance for yourself and your employees. Have a chat with your accountant and/or business manager to determine if it’s feasible to do so.

Two people with their laptops out and working on business financials.

Your Group Health Insurance Provider

You’ll have to make the tough choice of selecting a group health insurance provider that provides exceptional medical health coverage at a reasonable price. A few good medical insurance companies include Bestmed, Bonitas, and Discovery. Take a look at this post on the different medical aid companies in South Africa, as most of them provide medical insurance too.

Get insurance quotes from our website and choose the best one. The work doesn’t stop there, as you’ll also have to take note of their strict network-provider rules as well as what they cover.

Naturally, you’d want to keep costs low as a small business owner. But you’ll have to understand that the medical insurance product’s pricing is affected by whether it covers emergency hospitalisation, stabilisation, or illness. The more cover provided, the higher the premiums.

Medical Insurance For Small Business — Health Is Wealth

Medical insurance is one of those insurance types that small business owners need to think about carefully. While there are numerous benefits to obtaining medical insurance for a small business, a business owner must also consider the financial implications of doing so.

Ultimately, securing the health of your employees is a serious matter as healthier employees are more productive than those who are not. To ensure sustained profits and reduced employee turnover costs, look at obtaining medical insurance for your small business today.

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