Options For Buying Small Group Coverage Online

By Patricia Fusco | Posted February 26, 2003
Mounting health care costs continue to be a troublesome business matter for many small organizations. Nevertheless, health insurance is considered an essential employee recruiting and retention tool — industry analysts estimate that more than half of U.S. small businesses offer health insurance to their employees.

How can you be certain that you've got a good deal on your small group health insurance plan?

Try going online — you could save a great deal of time, if not money, by hitting the Web to shop for small group health insurance plans. EHealthInsurance and Quotesmith have helped many small businesses find affordable, first-rate health insurance coverage for employees.

But these online brokers can only show you policy comparisons in a limited number of states. The more populated the state, like New York or California, the greater the choice among bids from different carriers. Those in less populated areas, like Oregon or Rhode Island, will find limited choices for small group coverage — if there is any choice at all.

Health care plans vary from state-to-state because insurance is regulated at the state level — policies and pricing mechanisms vary accordingly. For the fortunate small business that has a choice of carriers, shopping for health insurance online can be very cost-effective.

Quotesmith and EHealthInsurance have a diverse database of carriers that provide small group insurance. Small businesses can research and compare insurance rates and options online. We gave both sites a spin to see what they could come up with for SmallBusinessComputing.com. After entering a few details like our zip code and number of employees, EHealthInsurance indicated it had 22 health plans for us to review. Quotesmith, at Insure.com, indicated we could choose from among 26 plans from leading health insurance companies to find the lowest bid for our coverage.

With both of these services, we had to enter pertinent details about our employee base, our company, and what type of insurance options we wanted to research. Both services provided us with a list of quotes showing the carrier, the price, and a plan summary — as well as contact information to speak with an insurance agent by phone.

Other Side of the Coin
Rather than choosing from a list of possible solutions and contacting each carrier, you could opt to put an insurance broker to work finding the right small group coverage plan for you. The BenefitMall encourages you to work with a broker — either your own broker or one selected from their referral network.

After you enter much of the same information as you would at the online quoting sites and select a broker at the BenefitMall, the broker will e-mail you a list of policies that meet your criteria. There's one catch to this service — you can't work around a broker by contacting the carrier yourself. The e-mail from the broker only includes a summary of details about each policy, the deductible, maximum out-of-pocket spend, and the price — but you can't tell who the carrier is. To get this information you have to speak with the broker.

HealthInsuranceFinders is a combination of brokerage referral and carrier services, but it offers a limited geographic selection of small group insurance options. In the states where this service does not offer small group coverage, you will be presented with the option of finding a program through one of its affiliates.

Can you reduce expenditures for your small group insurance plan online?

The answer depends on where your small business is located and how hard your insurance agent works to find you the best price and policy. The online services available today may indeed save time researching small group insurance plans — and time is money. But how much money you save will vary from state-to-state.

One thing is certain; these online health insurance tools are at the very least a good way find out if you're getting the best possible deal from your local insurance agent. Regardless of your company's size, it's good to know you're getting your money's worth.

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