Around 53 percent of small businesses list healthcare as their biggest concern, according to a recent survey by the NFIB Research Foundation. Historically, small companies have had many obstacles in their path to securing health insurance for themselves and their workers due to high costs and a shortage of options, according to USA Today. Insurance companies don't typically like insuring small businesses because more than half of owners are over 50 and this age range is at least 75 percent more likely to have pre-existing conditions that can mean more expenses for them down the road. Carriers make most of their money by spreading their risk around a large pool of workers that includes a high percentage of young people that don't use many of their services.
Despite still having relatively higher prices compared to large group coverage, the Affordable Care Act (ACA) has afforded many benefits to owners by guaranteeing them coverage despite pre-existing conditions, providing subsidies for low-income earners, and allowing employees of small businesses to get coverage without needing their employer to sponsor or pay for them. According to Inc. Magazine, sole proprietors can easily qualify for individual health insurance while the Small Business Health Options Program (SHOP) allows businesses of up to 50 people to select plans for their employees that can earn them a tax credit in the process.
Outside of government offerings, there are options in the private sector for business owners that offer more competitive pricing if they are willing to take the effort to shop around and can afford to lose the tax credits and subsidies. Private health exchanges are similar to the SHOP marketplace in that the owner will pay a set amount for each worker while still allowing them to choose the specifics of their plan as well as allowing any money they spend on coverage to come out pre-tax. Directly purchasing through a provider is a possibility as well, but it will require significantly more administrative work to start it up and keep it going.