Ideas to Help Control Health Insurance Costs
As health care costs continue to rise, businesses are facing some tough decisions to stay profitable while maintaining this important employee benefit. With insurance renewal season right around the corner, now is the time to evaluate your plan. Consider these cost-cutting ideas:
- Review your current plan and shop around. The first step to shoring up your health care benefits is to review your current insurance plan. What do you like about it? Where do you have issues? Engaging your employees and asking for their opinions can provide you some insight, as well. Having a full understanding of your plan allows you to effectively compare the costs of other insurance providers. In many cases you can save costs and add benefits simply by changing insurance companies or coverage options.
- Move to a high-deductible health insurance plan. The upfront savings realized by high-deductible health plans (HDHP) make them an enticing option for employers and employees alike. The monthly premiums for HDHPs are lower compared to traditional plans, but the employee has to pay more out of pocket for their health expenses because of the higher deductible. To offset the extra cost to employees, you can offer a health savings account (HSA) to pair with the HDHP. With this approach employees can pay for medical expenses with pre-tax dollars. You, as the employer, can help offset the cost of the higher deductible by making tax-free contributions to your employees’ HSAs.
- Consider self-funded options. If properly executed, self-funded insurance plans can save your business money and improve cash flow. The basic concept is that you (the employer) pay the medical claims directly, instead of paying premiums to an insurance provider. Switching to a self-funded plan involves hiring a third party administrator to process the claims, creating a reserve fund to pay the claims, and purchasing stop-loss insurance to protect your company from catastrophic events. All in, a self-funded plan can cut your health benefit costs by up to 10 percent, according to Hub International.
- Encourage alternatives to traditional doctor visits. When setting premiums, health insurance companies factor in the cost of covering the claims made by your employees. One way to help control these costs is to educate your employees on the alternatives to traditional clinics and emergency room visits. For example, there are now alternatives such as nursing lines, online doctor consultations and remote monitoring apps that can cut your costs and save your employees some money. With a lower claim history, your future insurance premiums may not be as impacted by skyrocketing health insurance costs.
- Promote employee wellness initiatives. Another way to lower medical expenses is to promote the health of your employees. Wellness programs can be as simple as offering flu shots, onsite cancer screenings or organizing a company 5k run. The options are endless, but choosing the correct approach is key to your program’s success. According to a study by Knowable Magazine, an effective program starts at the top. Before rolling out a wellness initiative, present your plan to your company’s leadership team to get them on board.
The proper approach to cutting health care costs is different for every company, so take the time to research your options to ensure the correct fit for your business.
As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.