Health insurance is one of the most important perks that employers can give to their employees. However, small business owners may not afford to spend a lot of money on the health insurance of their workers. Keep reading to learn how you can save money on small business health insurance.
Speak With Your Insurance Provider
If you cannot afford your current health insurance plan, consider speaking with your insurance provider about it. You do not need to stop offering insurance completely. If you have had your plan for a long time, they are likely to suggest options that you may not have considered.
Optimize Your Current Coverage
Speak to your insurance provider, and they may help you get the most from your coverage. Consider choosing lower policy limits or higher deductibles. Choose an option that matches your cash flow and the risk tolerance of your business. Take advantage of every opportunity to review your coverage and update it appropriately. If your business has changed its geographical market, exposure, or size you need to discuss your options with your insurance provider.
Consider investing in company wellness programs to reduce the amount you spend on health insurance. Some of the simplest things to do include filling the company kitchen with healthy snacks, free gyms, and regular health screenings. These initiatives will result in lower insurance premiums. They also promote health awareness and encourage employees to take better care of their health.
Partially Self-Funded Coverage
Consider offering partially self-funded health insurance plans for your employees. Such plans allow you to cover a greater part of your employees’ medical expenses. You will be required to send a monthly fee to a health insurance company just like with any other plan. A part of the funds will go into an account that pays the employees’ medical costs. The insurance provider covers extra costs if your employees’ medical bills exceed what you paid for. If, however, they are lower than what you paid for, you can get a refund. This option is appropriate if most of your employees are younger and healthier.
Health Reimbursement Accounts
Consider using health reimbursement accounts if you hope to save money. The federal law allows small employers who meet certain qualifications to help their employees settle the cost of buying insurance coverage on their own depending on their situation. The law allows employers to open health reimbursement accounts to help their employees. Their deposits are tax-advantaged, and employees can use the money in their accounts for their monthly insurance premiums. They may also use it for qualifying medical costs. With this option, restrictions and limits may apply.
Protect Your Business From Accident Claims
Review your auto insurance policy regularly to ensure that you are not paying for more than you should. However, your policy should give you sufficient coverage. Come up with clear policies to determine the use of your company vehicles. That way, you can minimize accidents and save money on the costs of medical bills after dealing with an accident. When employees are driving company vehicles, they need to meet certain safety requirements. If there are any safety issues, they should be brought to the attention of a manager as soon as possible.
Flexible-Spending Debit Cards
Flexible-spending debit cards make it possible for workers to cover the cost of medical expenses that may not be covered by health insurance. The debit cards are appropriate for paying for over-the-counter medications and co-pays. The amount they spend is deducted from their pre-tax funds.
If you are a small business trying to save money on your employees’ health insurance, consider purchasing cooperatives. You are likely to gain bargaining power, and your employees can enjoy extra benefits such as dental benefits and health insurance consultations.
In conclusion, small businesses that wish to provide health insurance must consider its cost implications. Consider your bottom line and the effect of health insurance on the financial health of your business. The amount you spend on health insurance for your employees depends on the type of business you own, the general health of your employees, and the extent of coverage you wish to provide. However, there are a few general guidelines that may help.
Like individual health insurance plans, the cost of your small group plan comes with different premium rates and deductibles. Work with your accountant to determine what you can afford to pay. Your insurance agent may help you make the best decision.