The goal is to keep costs low. Stay "lean." But there are some things you just have to fork some money out for to keep your business running, keep you and your employees happy, and keep the upward trajectory towards success. In our opinion, of course bookkeeping is one of those things. But insurance is another.
Insurance coverage for solopreneurs, startups, and small businesses can be daunting. But this is a necessary expense, not just legally, but also to protect yourself from any surprise health issues. So here are some tips and resources to help founders and solopreneur business owners navigate the murky waters of insurance coverage.
One rule of thumb says that if you are relatively healthy and have no preexisting conditions, you should purchase an insurance with a high deductible and low monthly premiums. This keeps your costs down if you're healthy and increases cash flow.
If you have an employee, or a few, some insurance companies like Zenefits would suggest you shoulder the majority of the costs, such as 80-90% of the coverage, but let the employees cover some as well. If the employee has a dependent, they suggest covering 50%.
But what about the Affordable Care Act? If you don't have health insurace you could face a penalty based on a flat number or a percentage of income, whichever is higher. If you choose to purchase health insurance, what you could pay is based on what you make. This can be tough for some self-employed entrepreneurs who can't forecast their salary, making this a hurdle to jump through right off the bat. But as an employer, you do not have to provide insurance to employees until you reach 50 employees who work more than 30 hours per week.
So you think you need to purchase health insurance? Check out some of these online options for you: