Selling Health Insurance to Small Business Owners

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When selling health insurance to small business owners, salespeople must be aware of small business owners’ top concerns. A recent opinion poll conducted by the Small Business Majority shows that the high cost of health coverage is a top concern for small business owners. 

Healthcare is an important issue for small businesses because it helps them attract and retain top talent. Access to quality healthcare also means that employees are less likely to miss work and have fewer absences because of illness, which also helps employers.

As a health insurance salesperson, it’s important to develop meaningful sales strategies that resonate with small business owners and relieve their burdens. 

Shortcuts:

Understanding the Needs of Small Business Owners

Effective Sales Strategies for Selling Health Insurance to Small Businesses

Outlining Legal and Compliance Issues

Leveraging Technology to Streamline Sales

Tips for Establishing Long-Term Client Relationships

Small Businesses Are a Large Demographic

Understanding the Needs of Small Business Owners

The U.S. Small Business Administration (SBA) classifies companies with fewer than 500 employees as small businesses, although the number varies by industry. Over six million small businesses employ workers. 

In 2023, just over 60% of employees under age 65 had employment-sponsored health insurance, according to the Kaiser Family Foundation. Most employees rely on their employers for health insurance for themselves and their families. 

Benefits of Offering Health Insurance

Despite the challenges of small businesses offering health insurance to their employees, there are several benefits to offering health insurance benefits. 

Today’s employees are looking for the full package before accepting a job. An attractive benefits package helps small businesses attract quality talent and retain employees longer.  WorkRamp says employees value employers who can offer them the following:

  • Comprehensive health insurance
  • Fair compensation
  • Work-life balance/positive work culture/meaningful work
  • Opportunities for advancement
  • Job security

Employees also value companies with strong leadership and those who share their values, such as sustainability, social responsibility, diversity, and inclusion. Depending on the type of business and how many people it employs, offering a health insurance plan can help employers meet legal requirements. For example, businesses with 50 or more full-time employees must offer a health plan to their employees. 

Challenges of Offering Health Insurance

With each new year, small business owners must find ways to keep healthcare costs down as rising healthcare costs increasingly impact their bottom line.

Larger companies tend to have more bargaining power with health insurers, making it challenging for small businesses to negotiate the best plans. 

Also, small businesses typically don’t have the same cash flow potential as larger employers, making it difficult for them to offer their employees the best health insurance packages.

Administrative costs for health insurance are also a problem for small business owners. Costs increase as employers take on new employees, and small businesses often don’t have adequate staffing to administer plans. 

Lastly, small companies may have limited opportunities for employee advancement, causing high turnover. Rapid turnover means additional work for human resource employees.

Making the Connection Between Business Goals and Health Plans

By clearly showing the benefits and challenges of offering health insurance, you can more effectively customize plans for different company sizes and industries. 

Effective Sales Strategies for Selling Health Insurance to Small Businesses

Small business owners will be inclined to shop for the best plans and pricing every year to help keep costs down. They’ll likely be frustrated by the time it takes to evaluate their options when they could be helping their business grow. 

To overcome these challenges, you’ll need to build trust and credibility with business owners, educate them about their options, and proactively find solutions. 

Building Trust and Credibility

While you may be adept at your craft of selling, the general public tends to be skeptical about salespeople. According to a survey by Hubspot, only 3% of people believe they can trust salespeople. 

To overcome skepticism, do your best to connect with customers on a personal level. Ask about their families, hobbies, or other interests. Use small talk as a springboard for getting down to the business at hand. 

Screen-sharing during presentations can help you build trust with consumers. Seeing is believing. As you converse with clients, share slides that demonstrate your expertise by sharing changes in regulations and plans over the past year. Talk about new trends on the horizon and the resulting impact on health plan choices. 

Actively listen to customers’ needs and provide meaningful solutions specifically tailored to them. Explain insurance terms and jargon customers may not understand.  

Communicate transparently. Be clear about limitations, and don’t exaggerate claims. Give customers the pros and cons of each plan and time to decide without pressuring them. For example, be sure they’re clear on the differences between HMOs, PPOs, and HSAs. 

Again, sharing slides will help clarify things business owners are unfamiliar with. Slides are also useful for sharing a variety of testimonials, case studies, and success stories. Use visual elements to reinforce the critical points. Draw from the most relevant examples of how your health plans will benefit your clients’ businesses. 

Take careful notes on the steps you promised to take after the appointment and follow through with them promptly. Clients will give you bonus points if you communicate with them on their preferred communication channels (e.g., phone, email, text, etc.).

Outlining Their Best Options

Small businesses can change a lot during the course of a year. The health plan that served them best during the previous year may not meet their current needs. Their current plan may not even be available even if they want to keep it. These issues will be on their minds as you start talking with them about options. 

In any case, you have opportunities to reevaluate the business’ health insurance needs and recommend the best options for the owner to review. 

Thoroughly research the available plans and highlight all the ways the company and its employees will benefit from recommended plans. Be sure you know and can explain each plan’s features and benefits flawlessly. 

Another way you can demonstrate your knowledge is to share information about health insurance tax credits that could offset their premiums. 

Addressing Objections Proactively

A big challenge in healthcare sales is overcoming objections. The two most common concerns are cost and accessibility of providers. 

JP Morgan Chase reports the median firms’ health insurance expenses increased by 19%. The company cites an example of a hypothetical company that paid $400 in monthly premiums in 2018 compared with $476 in 2023. That’s a significant increase for small businesses. 

Employers may also face complaints from their employees who cannot find providers to treat them. 

A PPO plan where employees can see the provider of their choice may be a good fit for some businesses, even if the cost is slightly more. 

In either case, be proactive about presenting transparent comparisons so they can envision how their chosen plan will work in practice. 

A viable way to demonstrate your expertise with small business owners is to incorporate information about legal and compliance issues they may not be aware of. 

Owners may not be aware of the special programs available to them, such as the Small Business Health Options Program (SHOP). Small businesses with 1-50 full-time and full-time equivalent employees can contract with SHOP health plans that offer health and dental coverage to their employees. 

Employers should know that offering a SHOP plan is the only way to qualify for the Small Business Health Care Tax Credit.

The criteria for the Small Business Health Care Tax Credit is:

  • They have fewer than 25 full-time equivalent (FTE) employees
  • The average employee salary is about $56,000 or less annually
  • The company pays at least 50% of your full-time employees’ premium costs
  • All full-time employees can enroll in the SHOP plan

Also, certain employers must provide information about obtaining Marketplace coverage to their employees even if they don’t offer health insurance. You can assist owners by educating them about the types of notices they must legally provide. 

Other Critical Conversations About Compliance

Consider having other critical conversations about legal and compliance issues, including:

  • HIPAA
  • COBRA
  • 90-day maximum limit for a waiting period
  • Summary of Benefits (SBC) disclosures
  • Flexible Spending Accounts (FSAs)
  • State-specific laws

Small business owners may also be interested in learning that by offering their employees a wellness program, the company can get rewards of between 30% and 50% of the cost of health coverage for their employees. 

By helping employees improve their health, they’re more likely to miss fewer days from work for illness and medical appointments, which is a bonus. 

As you create your presentation, be cognizant of the size of the company. When dealing with business owners with 50 or more full-time or full-time equivalent employees, impress on them that they must meet certain minimum standards for employer-sponsored health plans or be subject to a penalty called the Employer Shared Responsibility Payment. 

Reporting Requirements

In addition to the requirement for some companies to offer health insurance to employees, employers must be aware of the types of notices the federal government requires them to give employees. 

The IRS outlines which companies must send out notices and when. This is another viable opportunity to help business owners understand reporting requirements and what can happen if they don’t comply. 

Overall, you have lots of opportunities to show employers you have their company’s best interest at heart. Your knowledge and expertise in the health insurance industry will give them much-needed peace of mind. 

Leveraging Technology to Streamline Sales

Small business owners keep a lot on their plate. With so much health insurance information to cover in a short time, digital solutions will assist you greatly. 

Since this information is complex and acronym-heavy, a screen-sharing tool like CrankWheel can help virtual prospects get clarity about how to remain compliant with regulations. You can share your screen with any device, record the session, and redirect the screen to another page right after you end the screen share.  

Online tools and platforms will help you offer quotes with ease. 

Once a business owner has chosen a plan, guide them through the steps on how human resources employees can simplify the enrollment process. Many healthcare providers offer electronic enrollment processes that are efficient and user-friendly. 

Tips for Establishing Long-Term Client Relationships

The end of a sale doesn’t signify the end of the client relationship. In fact, it’s just the beginning. You can expect loyalty and referrals from clients who truly feel you are on their side. 

Small business owners will become loyal when they know they can count on your expertise for ongoing support. To that end, update your clients regularly on any policy changes, benefits, or trends they should be aware of. 

It also pays to do some digging about the availability of wellness resources and seminars to share with your clients during follow-up sales activities. 

These are strategic ways to offer your clients value beyond helping them choose the best health insurance plan for their employees while remaining compliant with state and federal laws. 

When you’ve done your job well, you will naturally build a network of satisfied clients. You can count on them to serve as your advocates for additional sales.

Small Businesses Are a Large Demographic

While small businesses generally have a small number of employees, the market for this demographic is large, making it a profitable market to pursue. 

At the same time, you gain the satisfaction of helping small businesses offer the best available health coverage to their employees. 

Small business employees will also benefit by getting access to quality healthcare services that keep them healthier and working more days of the year.

To be successful in health insurance sales, you must put yourself in the client’s shoes. Health insurance is expensive, which isn’t likely to change anytime soon. The more small businesses must pay for health plans, the more it impacts their bottom lines – the whole reason for being in business.

Want to help small businesses navigate health insurance with confidence? CrankWheel’s instant screen sharing solution makes it easy to deliver clear, personalized presentations that address your clients’ concerns in real-time. Learn more and see how CrankWheel can boost your sales success for free at CrankWheel.com.