Many businesses recognize the importance of providing healthcare benefits to their employees. It’s an investment that results in healthier and more productive workers, less absenteeism and improved morale. However, it would be great to have your cake and eat it too. Healthcare can still be a struggle for small companies. Are there any ways a small business could cut down on its health care related costs? Well, the answer is yes, and here are a few ways how this could be accomplished.
Group health care insurance does have its benefits, since the worker also contributes to family plans. However, if an employee who earns an average salary is only contributing a yearly amount of around $5000 to cover for the cost of their family health care, it might make more financial sense to set them up with an individual plan that has been bought through the exchanges under the ACA.
Of course, this means that employees would no longer be responsible for making contributions at all. Plus employees who were eligible for subsidies would pay less than an average of a hundred dollars per month for their premiums. Additionally, the quality of the individual plan could be better than what the company had to provide earlier. All of this combines to make individual plans under an ACA sponsored exchange a good course of action for small sized organizations.
Then set up a health reimbursement account that would help to serve offset your workers’ medical expenses. You can then set the expenses employees would be expected to reimburse. In this way, their personal expenses would be curtailed. Plus, if not all the employees utilize their funds in the HRA, that money will still be the company’s. The organization can then better control the way funds are spent.
Interestingly, small firms can wield more influence over the size of their annual premiums than you might think. Small business owners often do not grasp how much control they have over setting the terms of their own premiums. Companies with around 50 to 100 employees have room to negotiate their premiums. Enlist the help of a broker who will be able to negotiate on your terms by looking at factors that would lower the premiums. These could include past claimants who have since left the company.
Many physicians have started to partner up with companies in order to provide employees with cheaper primary and preventative care on a fixed monthly, quarterly or annual basis. This has come to be called direct primary care. When this is paired with a health insurance plan that has high deductibles, the results can be amazingly affordable for a small business, potentially saving around 15% over what health insurance would help save. One problem, however, is that this kind of care can’t generally help with dangerous conditions like cancer.