Save Money on Small Business Health Insurance

Small businesses face many challenges in today’s economy, including the cost of providing employee health insurance. According to the Kaiser Family Foundation (see page 6 of this report), businesses have faced a 119% increase over the past decade in the cost of providing health insurance to their employees.

Yet to grow and prosper, small businesses have to recruit and retain talented and dedicated employees--which of course requires offering the right benefits package, including the all-important health package.

Here are some tips that could reduce small business health insurance costs and help companies attract and retain good employees.

1. Keep employees healthy. Wellness programs can be very affordable and offer a great return on investment by keeping your employees healthier and more productive.

2. Use HSAs, which are tax-exempt for employees and help businesses reduce health insurance costs. A health savings account (HSA) combines a high-deductible health insurance plan with a tax-free savings account for employees. HSA accounts may be funded by the employee, employer, or both. Participants in an HSA use the money to pay for medical expenses.

3. Reduce coverage and/or increase employee contributions. The downside of this strategy is that it will be unpopular with employees, but there are ways to mitigate the impact. Some companies, for example, retain medical coverage but drop dental and vision coverage and set up flexible spending accounts (FSAs) that allow employees to set aside pre-tax dollars to pay for out-of-pocket healthcare expenses. Employers can contribute to employee FSAs, which is often more affordable than paying for comprehensive coverage and is perceived positively by workers.

4. Most important--Shop around. Barham Benefit Group offers a wide range of group health plans. We can create a plan that best suits the needs of your company and employees. As an independent agency, BBG works with a large number of insurance carriers and can help you build a plan that offers your employees the benefits they need.