How Can Small Businesses Reduce Health Insurance Costs?

A big expense for small start-up businesses is health insurance costs for employees. Considering the number of manpower, the incremental costs of annual premium can range anywhere from five percent up to 20 percent per year. Shouldering the total expense for insurance can definitely hurt the financial standing of the organization, however, this can not be easily neglected. It is against the law for an employer to eliminate this benefit for his workers.

Now, the question is - What are some steps that employers can do to shoulder costs without difficulty? Here are some tips:

1. Share health insurance costs with your employees.

Surprisingly, small companies actually pay hefty amounts for the health care bill of their workers. Small start-ups could implement cost sharing on insurance as this is a usual set-up for bigger and more stable companies. This will also enable employees to realize the value of having a health insurance.

2. Determine if there are employees that can be moved to the state high-risk pool.

 In case an employee gets afflicted with a serious ailment such as a cardiovascular disease or cancer, it is recommended that this affected individual be moved to the state high-risk pool. If the said individual remains within the small-group plan, the insurance premium is expected to increase even for those healthy members. It is easier to negotiate lower costs when all members of the group are said to be in their pink of health.

3. Acquiring an HMO is another probable way of reducing health insurance costs.

HMO practically provides full medical coverage as compared to the traditional health insurance. For a flat monthly fee, employees can enjoy full medical benefits including routine preventive care. This arrangement has proven to be an effective means of regulating costs.

Also keep in mind to negotiate with health care vendors before renewal of HMO coverage in order to get the best coverage for the lowest possible cost. Considering other vendors could also work.

4. Come up with an Employees' Wellness Program which could also reduce health insurance costs.

A wellness program can encourage employees to lead a healthy lifestyle. Activities such as disease prevention awareness, sessions with a health coach or conducting group exercise classes could improve the general well-being of an individual. This would later on benefit the body, thus, trips to a health care provider is not necessary.

Health insurance is important to everyone. However, with the rising costs of insurance premiums, small companies are thinking of ways how to decrease this expenditure in order for businesses to survive. At the end of the day, the best way to lessen health insurance costs is to make healthy choices in order to eliminate spending due to medical needs.