Health insurance is one of the most significant expenses for small businesses, but providing quality coverage is essential for attracting and retaining top talent. The good news? There are ways to reduce health insurance costs without sacrificing the quality of benefits you offer.
This guide will show you how small businesses can lower health insurance costs with practical strategies to manage expenses while supporting employee well-being.
Compare Insurance Providers & Plans
Depending on the size of your small business, there are a variety of options available for what plans you can offer and what providers you can work through. Many small businesses stick with the same insurance provider year after year, but taking the time to shop around and compare rates and plan offerings could result in significant savings.
A benefits consultant can help you compare potential premiums, coverage, and network options. Keep an eye out for cost-effective options like high-deductible health plans (HDHPs) paired with health savings accounts (HSAs), which often have lower premiums and offer tax benefits for both employers and employees.
Utilize Government Programs
Government programs like the Small Business Health Options Program (SHOP) can be a game-changer for small businesses. SHOP is designed to make it easier for small businesses with 50 or fewer employees to provide health insurance.
SHOP allows you to compare plans, apply for small business healthcare tax credits, and offer multiple plan options to your employees. Businesses that qualify for these tax credits can save up to 50% of premium costs, which is a significant reduction in expenses.
Offer Multiple Plan Options
Employees have diverse health needs, and offering multiple plan options can help lower costs for your business. For example, younger, healthier employees might prefer an HDHP, while others may prioritize lower deductibles or broader coverage.
By tailoring your offerings to meet a variety of needs, you can reduce unnecessary spending while still providing quality options. Additionally, providing choice fosters goodwill and can boost employee satisfaction.
Reanalyze Your Benefits Package
It’s important to regularly assess your benefits package to see what your employees are using and what is proving to be a waste of money. For example, if certain perks like vision insurance or wellness stipends are underutilized, you may be able to reduce or reallocate those funds toward more valuable benefits.
Offer Employee Wellness & Preventative Wellness Programs
Encouraging a healthier workforce can lead to significant long-term savings on health insurance costs. Employee wellness programs, such as fitness challenges, smoking cessation programs, or subsidized gym memberships, can reduce health-related claims and increase productivity. Make sure your employees are aware of and engaged with these programs to maximize their impact.
Additionally, consider offering preventative wellness services. Prevention is one of the most effective ways to reduce long-term healthcare costs. Preventative wellness services, such as flu shots, health screenings, and routine checkups can help your employees stay healthier and identify potential health issues early and before they become costly claims.
Health insurance doesn’t have to break the bank. Understanding how small businesses can lower health insurance costs can help you provide the coverage your employees need while managing your costs effectively.
Need help navigating your health insurance options? As a small business helping other small businesses, we’re here to support you. Contact us today to learn more!
Please let us know if you have any questions. We understand that local companies have unique needs that most national firms don’t consider or struggle to identify. This leaves your people with a less effective, one-size-fits-all benefits plan. However, our ability to cater to the needs of our clients comes from decades of client partnerships. This perspective allows us to fully address unique needs and generate creative benefits plans.
You shouldn’t have to worry about just being a number, offering a generic plan, or getting the unique support you need. Call us today.
This Benefits Insights is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice.