Health insurance premiums are an absolute necessity of responsible entrepreneurs to attract young talent. But rising costs associated with it can derail financial budget – particularly of small and rising businesses.
A pragmatic employer should look for multiple ways to minimize health insurance costs without compromising his/her employees' health. It becomes even more critical for smaller firms as health insurance expenses are 18% more for smaller businesses than larger corporations. It drains a vast chunk of amount from your account that you need to grow business.
If you're a small business manager who is struggling to meet the insurance costs, then read the below five tips to cut your small business insurance costs.
Encouraging Better Employees Health:
A workplace with healthy employees plays a pivotal role in minimizing healthcare bills and improving your business's productivity. Many small businesses have launched 'wellness programs' to check the employees' health and take preventive measures.
This program may include on-site fitness centers, healthy lunch, smoking cessation initiatives, stress reduction programs, disease management for afflictions, and disease screening facilities. Such programs are very well received by employees and save you thousands of dollars in the long term.
Cutting Back Healthcare Coverage:
This step may go unpopular among the employees, but it is a reasonable plan to cut back health insurance costs. Asking your employees to contribute more to the monthly premium or cutting a few expensive and not-so-common benefits such as dental and vision insurance can save you a lot. You may talk to employees and take their opinions on what benefits they want to have – and filter your options.
Once your business is on track, you can revisit the conditions and may expand the coverage again.
Make a Health Saving Account:
Health saving accounts have become a buzz word in small businesses with more and more owners establishing them to cover employees' medical bills. These are tax-exempt accounts that cover a portion of employees' medical bills.
To create a health savings account, you must have a high-deductible insurance plan. Both contributions to and deductions from this account are tax-free. It can be funded by both the employer and the employee, and as the money grows over time, they can use it to cover medical bills. These accounts are beneficial for healthy employees who don't have to visit a doctor regularly.
Group Insurance Plans:
These plans are more affordable as more people are participating in them. A small group may include from 2 to 50 employees—the greater the number, the lower the rates. Compared to individual insurance coverage, you can save a lot through group insurance plans.
Explore Your Options:
Do extensive research before landing choosing a health insurance plan for the employees. Talk to different providers, brokers, and small business owners to get complete information on what insurance plan best suits your business. Spending more time upfront will save you a lot of trouble and money down the road.
Any questions? Please reach out to one of our experienced experts.
*The information contained in this article is not legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law.