One challenge that faces many small business owners is the ever increasing costs associated with employee health care. It can be quite a challenge just to keep health care costs flat, let along reducing them. This leaves many small business owners worried about the constantly rising price tag. That said there are some things small business can do to curve these hefty costs. Here are a few options small firms might consider to try lowering their health care costs.
Negotiate Your Rates
One way business can lower healthcare costs is to negotiate their group insurance premium. Many businesses think that when their new annual premium arrives in the mail, that number is set in stone. However, the truth is many of these firms have more leverage than they realize. While health insurers will provide reasons for the increased rates, a good broker can point out factors that the insurer should take into account to lower the premium. For example, if a claimant has since left the company or the health of the company is improving, these are factors that can give businesses some leverage to reduce costs.
Check Out the SHOP Exchange
This is a viable option for businesses with 50 or fewer employees. These small businesses can turn to the Small Business Health Options (SHOP) Exchange, which is a federal marketplace where businesses can shop for small-business plans. It also provides access to small business health care tax credits. Some states even offer “employee choice” plans where the employer can designate the amount of money they want to contribute to premiums and the employees can choose which health and dental plan best suits their needs.
Convert Your Group Plan into Individual Plans
Another option for small businesses that can help cut down on costs is to convert employees to individual plans as opposed to a group plan and then offer to reimburse employees for their premium. Individual insurance tends to be better and cheaper than group health insurance, and companies can have complete control over the cost of the health care plans.
Consider Direct Primary Care
This type of health care is becoming increasingly popular as more and more primary-care physicians are partnering with employers to deliver affordable preventative and primary care at a fixed-monthly membership rate. Instead of billing a patient’s insurance company, direct primary care providers charge users a monthly fee for unlimited access to their doctor. While it can be a much more affordable option for basic health care, it does not cover catastrophic illness. Therefore, it would need to be used in conjunction with a high-deductible health insurance plan. This is still a more affordable option that many traditional group plans.