How Business Owners Can Keep Their Employees – and Their Balance Sheet – Healthy
It is a tricky balancing act for many small business owners: providing health insurance for their employees (and reaping all of the benefits of doing so) on one hand, while reducing small business health insurance costs on the other hand.
This is an important dilemma to resolve because offering a robust health insurance plan has many business upsides, such as attracting and retaining the best talent, greater job satisfaction and productivity, not to mention substantial business tax breaks. But these upsides often come with significant downsides on a company’s balance sheet. According to a 2020 Kaiser Family Foundation survey, the average annual employer contribution to the premium for an employee’s family coverage in 2020 was $21,324, a 22 percent increase from the previous year. Even for a business that has a relatively small workforce, those numbers add up quickly.
Fortunately, there are ways of reducing small business health insurance costs that can keep employees covered while keeping more dollars in the company’s bank account.
Here are four tips for reducing small business health insurance costs:
1. Keep Your Employees Healthy
It is a simple equation: the more healthcare employees need, the higher the costs of healthcare will be to their employer. While no policy or program will keep workers from getting sick or needing medical care, employers can take steps to keep their workers healthy and reduce the likelihood of illness or injury.
An increasing number of small businesses offer wellness programs that provide employees prizes, perks, rewards, or other benefits if they get routine screenings, make lifestyle changes such as diet and exercise, and participate in other programs designed to prevent illness and chronic health problems.
Companies can also encourage preventative health care, stock their lunchroom with healthy beverages and snacks, and even offer their employees on-site fitness classes or facilities.
2. Consider Health Savings Accounts
Health savings accounts (HSAs) are tax-exempt accounts that employees can use to pay for certain medical expenses. These accounts can be a win-win by providing employees with tax breaks while also reducing small business health insurance costs. Employer contributions are also tax-deductible for business owners, should the business decide to make such contributions.
A company and its employees can only use an HSA with specific HSA-compatible insurance plans. These plans usually have higher annual deductibles but lower monthly premiums.
3. Reduce Coverage Or Increase Employee Contributions
No business owner wants to tell their employees that they need to pay more for their health insurance, just like no business owner wants to say that their coverage will offer fewer benefits, less choice, or higher deductibles. But doing either or both of those things is undoubtedly an effective, if uncomfortable, way of reducing small business health insurance costs.
4. Explore and Understand Your Options
You may know everything about your company and your industry, but you may still be lost when it comes to the complicated world of group health insurance. It can be difficult to figure out what the best option is for your company if you don’t know what your options are. Even if you were inclined to spend hours exploring all of the providers and plans available, determining which one offers the best coverage at the lowest cost to your business can be difficult in the extreme.
That is why so many small business owners rely on an independent group health insurance broker like Preferred Insurance. Our brokers bring clarity to the complexities of health insurance and explain terms and benefits in simple, understandable terms. We have the experience, knowledge, training, and resources to find flexible plans with the best options.
Because we work with several different carriers, we can provide plenty of options for your small business health insurance that offers a wide variety of features at prices likely to fit any budget.
As an independent broker, we won’t make any more or less money for recommending one plan or carrier over another. As such, our only incentive when proposing coverage options is to provide you with the plan that’s best for you, not the plan that’s best for us.
Reducing Small Business Health Insurance Costs Is What We Do At Preferred Insurance
As an experienced, locally owned Colorado Springs business health insurance broker, Preferred Insurance works closely with businesses of all sizes to develop and implement health insurance programs that make sense for employees and employers alike. Our knowledgeable and accessible representatives are here to answer your questions and provide solutions that can keep you and your workforce safe and healthy.
Call Preferred Insurance today to schedule a free consultation about your small business health insurance needs.