What Kind of Insurance Is Best for Entrepreneurs?
As any entrepreneur might know, insurance is a tricky subject to tackle when you employ yourself or a small group of people. Obtaining health insurance is a must, but it’s vastly different from signing up for a corporate insurance plan. When you are employed by a company, you sign up for insurance when you start and you renew your plan during open enrollment.
Pretty simple, right?
But when you are self-employed or run your own business, there are a lot more considerations in front of you.
Insurance for Solopreneurs
Self-employed? You still need health insurance for yourself and your family. Although self-employment has its benefits, one drawback is finding insurance. Most insurance carriers want to charge a higher premium when you are not on a group rate. Unfortunately, you might end up paying more for an individual health insurance plan versus signing up for a plan as a group even if the plan includes your family.
You’ll want to check rates from several different carriers and evaluate your current health situation to decide which plan is best for you. Be sure to consider pre-existing health conditions as they can drive up your monthly premiums.
Insurance for a Small Company
Every entrepreneur starts on their own and eventually hires a team. Once you begin hiring new team members, you’ll need to decide how you want to offer insurance to them. Like a desirable salary and bonuses, insurance benefits are a major attraction for those seeking work. Unlike individual health insurance, you’ll provide your employees with a group health insurance plan. And lucky for you, group health insurance plans have lower monthly premiums. Again, you’ll want to review plans from a variety of carriers to find one that fits best for your company.
Health Insurance Can Be Regional
As you shop for new insurance plans, you’ll also discover the plans can be somewhat regional. For instance, a health insurance plan in Manhattan, New York will likely cost you more than an individual health insurance plan in Bend, OR. It’s best to consult with an insurance carrier or individual insurance provider to understand what is best for you and your business.
Think About Long-Term Costs
Insurance isn’t a one-time investment for your business. You’ll need to consider the cost accrued for insurance over the next 3 years, 5 years and 10 years. The insurance plan you select should be part of your overall business plan. Determine where it fits into your costs and how you can scale it over time.
Before you begin to tackle health insurance for your business, you’ll want to be sure your business is correctly established first. You’ll need to properly register your business as a sole proprietorship, limited liability corporation, s-corporation or c-corporation. Depending on the assets your business has and how you want to approach taxes, you may choose one entity over another. If you haven’t done so already, consider hiring a business lawyer to review your articles of establishment. While it may be costly, an attorney will advise you on what you need to do to properly and legally establish your business.
If you have recently purchased insurance for yourself or your business, let us know how it went in the comments.