5 Easy Steps On Reducing Health Insurance Cost For Small Businesses
Healthcare costs increase up to 30% every year. On the rate its going, it’s not hard to imagine health insurance to top off a staggering amount of $3000 per employee. Healthcare experts also predicted that for the next 3 years, there will be a 20% annual increase. These numbers are unbelievable so if you are not taking extreme measures on how to reduce health insurance cost, trouble is heading your way on the coming years.
As always, the first action is to be aware of the system’s mechanics. Small business owners do not give that much attention to health insurance. Don’t just depend on your agent or broker to do all the work for you. Compare health insurance benefits, provider’s record and learn how to reduce health insurance cost. Here are excellent five recommendations to reduce health insurance and also help your employees.
1. Implement an Increase on Cost-Sharing By Employees to Reduce Health Insurance Cost
This is top of the list for healthcare advisors. Large corporations pay lesser on health insurance compared to small businesses. It has been found out through research that protecting employees from healthcare costs and encourage more unneeded health services. A health survey by National Business gathered data that says 52% of the companies that participated said they shoulder 100% of their worker’s health insurance premiums. Around 45% wants to implement an increase on their employee’s deductibles. Increasing the deductibles into $250 would reduce health insurance cost for each coverage about 11%.
2. Let Employees Pay with Tax-Free Dollars for their Premiums
Letting employees have a flexible paying term on their health insurance and other un-reimbursed expenses encourage them to pay more punctually. Employees tend to save about 35 cents because of the absence of taxes, making it more advantageous on their part. The owner in return can reduce expenses too by decreasing the employee’s basic wage, which is used to pay Social Security and other needed taxes. In this way, owners and employees can reduce health insurance cost.
3. Transferring High-Risk Workers
Premiums increase very fast once a member of a small business health insurance plan gets very ill. Being the employer, you have the authority to transfer high-risk individuals, especially those with pre-existing condition such as heart ailments and cancer, to the State’s high-risk pool. You can reduce health insurance cost by negotiating for lower premiums for the healthier employers.
4. Switching to Blue Cross or Blue Shield
Both plans host an open-enrollment on some states as an alternative high-risk pool, providing service to any groups who can buy insurance. There are 21 Blue Cross organizations nationwide that offer open enrollments. If the state you are in has this service, you can transfer your high-risk employees to these plans to reduce health insurance cost.
5. HMO’s are Better
Unlike conventional healthcare plans, HMOs cover all the medical needs for a low and fixed monthly payment. It’s obviously cheaper than your regular health insurance plans. It is proven to control and reduce health insurance cost than any other plans. It even employs doctors directly and pays them as regular employees.