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5 unforgivable sins of small business health insurance

Posted by K. F. on July 23, 2014


Small business health insurance is riddled with complications and difficult conditions.  

Take a look at these 5 unforgivable sins.

1. High Cost of Premiums  

Under a traditional small business health insurance plan, you are charged a monthly premium for coverage regardless of  access or usage to the plan. Should an individual access the program in excess of the insurance company’s expected ratio, the monthly premium rate will be increased at the annual renewal of the policy (also known as premium creep). Beyond usage, another significant factor that affects premiums include the age of the individual who is purchasing the coverage - the older the individual, the higher the rate will be.

2. Limited/Restricted listing of eligible medical expenses

Under a traditional small business health insurance plan, eligible medical expenses are restricted by definition as outlined in the Health and Dental policy booklet. Items that you wish to claim under this policy may be restricted by an annual or life time maximum, or require special authorization in order to obtain eligibility. At time of enrollment, medical history will be requested and pre-existing conditions may be excluded or reduced from coverage.

3. Age Restrictions 

With a fully insured program, once you have obtained the contract termination age of 65 or 70, you will no longer be able to access coverage. If coverage over age 65 or 70 is available, it will be more restrictive than the under age 70 plan and medical underwriting may be a requirement for coverage.

4. Complexity 

Under a fully insured program, you will receive a plan booklet outlining the items that are covered and also the ones restricted or excluded by definition, co-insurance, deductibles or fee guides. Figuring out what your coverage is and if it will be reimbursed partially or in full is terribly complicated.

5. Deductibles 

Through a traditional insured program, your benefits may be restricted by an annual single/family deductible or be restricted by a co-insurance of 50%-80%, depending on the type of service. Also, there is a limit for the number of visits and treatments.

Do you own a small business in Canada? Break free from restrictive and expensive nature of health and dental insurance by opting for a Health Spending Account. Take control of your costs and get 100% coverage.

Beginner's Guide to Health Spending Accounts