The Small Business Guide to Offering Dental & Vision Insurance

Posted: November 10, 2021

More small business owners offer dental and vision insurance to employees than ever before. Employer-provided plans are the highest subgroup of health care coverage across the nation. When it comes to providing coverage, more is certainly better for employees. Offering dental and vision insurance for small business employees can promote employee health and encourage employee loyalty to your business. 

It is essential to consider the cost of employer-sponsored health insurance to both your business and your employees, as well as what coverage options are available. Fortunately, there are many plans to choose from so you can provide adequate coverage for your employees. 

Understanding Health Insurance 

There are several options for dental and vision for small businesses. Before settling on a dental or vision plan for your company, you should know some essential information about small business health insurance. Here are a few factors to consider: 

• Your business size: The number of people you employ makes a difference in the insurance you are required to offer. If you have fewer than 50 employees, you are not required to provide any health insurance, although doing so can benefit you and your employees. Some plans also require that a certain percentage of your employees accept the plan you offer.
• Required coverage: You may need to check with certain agencies to determine if the insurance plan you offer meets any applicable coverage requirements. 
• Employee status: Most insurance plans are applicable for full-time or full-time equivalent (FTE) employees. You can offer insurance for part-time employees, though they will not count toward the percentage of FTE who must accept a plan. 

Small businesses can either purchase one coverage plan for all their employees or allow employees to select from a range of options. Coverage options could range from four to six or more. A range of options can help you tailor your insurance benefits package to employees’ individual needs, so employees only pay for the coverage they think they will need. Offering various options may sound more expensive, but insurance providers allow small businesses to provide as many as 15 insurance plans while minimizing the employer’s costs. 

Small businesses can also decide how much of their employees’ premiums they will pay. This flexibility applies to standard health insurance, dental and vision. However, most insurance plans do not include dental and vision coverage because they are considered supplementary for adults. For example, dental coverage is only available in specific Marketplace healthcare plans or as standalone plans. 

Your small business is eligible for insurance plans through Covered California if: 

• You have at least one W-2 employee. 
• A large percentage of your employees are California residents. 
• You have at least one but not more than 100 employees who meet certain requirements. 

Insurance Plans Available for Small Businesses 

There are several ways that a small business can provide or assist their employees with paying for health insurance, including: 

• Association Health Plans: Small businesses and sole proprietorships can join with other companies and purchase an Association Health Plan, which provides the lower rates that larger companies generally receive. 
• Small Business Health Options Program (SHOP): The Affordable Care Act established SHOP for small employers with between one and 50 full-time and FTE employees. SHOP plans come with a range of payment options.
• Self-insurance: Some smaller companies with relatively healthy employees may choose to self-insure, though these costs can quickly add up if an employee becomes seriously ill. 
• Health Savings Accounts: Health Savings Accounts (HSAs) can pay for expenses like deductibles that insurance will not cover. Both the employee and the employer can deposit money into an HSA. 
• Qualified Small Employer Health Reimbursement Arrangement (QSEHRA): This program allows employers to reimburse workers for their premiums for the insurance plan of their choice. 

SHOP is worth discussing in greater detail, as it applies to small businesses with one to 50 employees and offers many options for coverage. SHOP plans cover ten essential health coverage benefits, including emergency services, hospitalization, prescription drugs, pregnancy and pediatric services, including dental and vision. 

Before offering dental and vision coverage for small business employees through SHOP, answer these questions to determine if the plans are right for your business and employees: 

• How many options will you offer your employees? 
• Will you include dental, vision or both in your benefits package? 
• How much of your employees’ premiums will you pay?
• Will you offer coverage to part-time employees and dependents?

SHOP insurance plans come in four categories: bronze, silver, gold and platinum. In each category, the insurance company and employees will pay a different percentage of the costs. The higher the percentage that the insurance company covers, the lower your employees’ premiums. 

All small business healthcare plans offer pediatric dental and vision, as these options are considered essential for children under 19. Any health care plan for employees must include this dental option, whether a standard health plan or standalone dental package. You can offer your employees separate family dental and vision plans, although it will come at a separate cost. To purchase a dental plan through Covered California, at least one adult in the family must also have bought a bronze, silver, gold or platinum SHOP plan. 

Benefits of Providing Dental and Vision Insurance

There are several reasons why you should offer dental and vision coverage for your employees. Providing supplemental insurance like dental and vision in your benefits package can help employees stay healthier longer. Good dental health promotes a better quality of life and can help prevent oral disease. An eye exam can also reveal the early onset of diseases like diabetes, high blood pressure and some cancers. 

Some candidates may choose a job that offers dental and vision coverage over one that does not. Providing supplemental insurance can help you increase employee loyalty. Including insurance in your benefits package, along with dental and vision plans, can go a long way toward improving employee retention. With greater access to dental and vision insurance, your employees can enjoy better overall health and save money on the health care they need. 

Health insurance is beneficial for your business, too. Enrolling in SHOP allows you to take advantage of the Small Business Health Care Tax Credit, in which the government may reimburse you for up to 50% of the costs you pay toward your employees’ premiums. Your small business qualifies for the tax credit if it: 

• Has fewer than 25 employees working full-time or at full-time equivalent.
• Has an average employee salary of $56,000 or less. 
• Pays at least 50% of full-time employees’ health insurance premiums. 
• Offers SHOP coverage to full-time employees.

How to Include Dental and Vision Insurance in Your Benefits Package

Including dental and vision for small businesses can be a great way to care for your employees. With the tiered SHOP structure, you can easily compare plans and prices to see which options work best for your California small business. First, determine if you meet the following criteria to qualify for SHOP: 

• Have one to 50 FTE employees
• Offer insurance coverage to all full-time employees
• Enroll at least 70% of the employees to whom you offer insurance
• Have an office in California

To offer SHOP to employees, you can contact a SHOP-registered insurance agency to get started. You can provide a standalone dental or vision plan in addition to standard SHOP insurance. Talk to your insurance agent or company about SHOP dental and vision plans to see which coverage options are best for your employees. 

Contact Health for California for Small Business Health Insurance 

If you want to provide your California small business’ employees with dental and vision coverage, Health for California is here to help. We are a Covered California-certified insurance agency ready to partner with you to find supplemental insurance plans that meet your needs and budget. 

Whether you need complete coverage, standard benefits or anything in between, we can help you with all of your small business employee insurance needs. Online application is easy and fast, and our helpful agents are prepared to help with any questions you have. Contact us today to see what Health for California can do for you.