At many small businesses in America, health insurance costs are second only to payroll. You want to offer your employees the benefits they deserve, but you can’t afford to empty your accounts in the process. What’s the answer?
As a longtime agency owner, I’ve gone through all the typical frustrations of employee healthcare planning. Most providers make it seem like business owners have little control over benefits packages: We can either sit tight and hope our premiums don’t spike every year, or we can look for another provider with nearly identical prices and policies.
Fortunately, small businesses have more options today than ever before.
Healthcare policies have not only changed for the better, but companies also have more flexibility in how they implement those policies now.
Remember that you don’t necessarily need “full coverage” to get full coverage.
Many plans offer inflexible arrangements that include administrative fees, the costs of claims, and extra taxes beyond certain thresholds. These arrangements might make sense for a company with a couple dozen employees, but smaller businesses don’t necessarily need that much coverage. With these plans, you may get back some money at the end of the year, but you also have less control over your cash flow.
Rather than accept the status quo, consider the following ways to keep health insurance costs down without cutting your employees' benefits:
1. Telehealth and Video Checkups
Not every health need is a health emergency. A vomiting child deserves attention, but if the solution is bed rest and Sprite, why waste half the day at the doctor?
Most of the time, telehealth options come through independent providers that you connect to through your plan’s advocacy service. Every telehealth call comes out of your claims expenditure, which means you pay less for those small-time concerns. Just think: You could enjoy average cost savings in the hundreds while employees enjoy having more modern options that don’t require rearranging their schedules.
2. Fiduciary Providers
Pharmacies charge hefty fees for their drugs. By switching from a regular pharmacy provider to a fiduciary provider, you can cut the costs of many medications — even generics.
Fiduciary providers, both in finance and in healthcare, are legally required to act in the best interests of their clients. That means your fiduciary providers are loyal to you, not the plan or the insurance company. If you would benefit by moving from a full insurance plan to a self-funded arrangement, your fiduciary advisor can help you make that decision.
Look for a fiduciary third-party administrator to help navigate the common pitfalls of health plan management. Ideally, you shouldn’t need to worry about anything beyond the bill. Your fiduciary third-party administrator should handle pharmacy benefits to ensure employees (and you) pay the lowest possible prices.
3. Wellness Programs
The jury is out on whether employee wellness programs directly affect healthcare costs. Maybe your army of gym-using, diet-following workers will stay healthy; maybe some unknown variable will tank your plan. You may not be able to keep your bill lower with wellness programs, but you can make more money and reduce the effects of unexpected costs.
Employees who live healthier lives offer more value to their employers. A culmination of studies on health-related productivity reports that employees with access to wellness programs miss fewer days of work, stay with their employers longer, and are more engaged at the office. Put together, these factors help small businesses make more money.
Your wellness program may or may not help you reduce your healthcare bills. That said, if you add money to the other side of the equation (through more productive employees), the savings are essentially the same.
4. Health Savings Accounts
Health savings accounts, or HSAs, solve two problems in one: Not only do they help employees pay for healthcare and save employers money, but they also provide an additional vehicle for tax-free retirement savings.
Typically, the only plans that qualify for HSAs include high deductibles. These accounts include a variety of eligibility requirements for employers to navigate. Don’t fret, however — rely on your fiduciary partner to help you pick the right plan.
Not all of your employees will take advantage of an HSA, but the benefit of flexibility will appeal to workers for whom the plan makes sense. Some people may max out their HSAs to save for the future; others may make partial contributions to cover upcoming health costs.
These tips will not make healthcare cheap for your small business, but they will help you trim the fat without sacrificing your employees’ well-being. Work with your agent and fiduciary partner to discover more options that could help you save.