Combatting Healthcare Costs as a Small Business
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Is your small business struggling with healthcare costs? Are you looking to find a different health insurance provider because your business's costs have gone up? Are you looking for different health coverage options for your employees? Do you need to make changes to your insurance policy based on new employee needs?
The United States healthcare system is very different from other advanced industrialized countries because we do not have a uniform health system (i.e., universal health care coverage/). The healthcare system is not managed at a national level, rather a single-payer national health insurance system (or a multi-payer universal healthcare fund, also referred to as a hybrid solution/). Because of the model used by our country, we have seen healthcare costs skyrocket and many disparities with the coverage.
With the costs on the rise, you may find your small business struggling to find coverage that works for your budget and your employees' needs, or maybe your small business is struggling to pay the costs of your current contract. Either way, there are ways to combat the costs of healthcare costs for your small business:
Check the math
The difference between plans can be significant, but you want to remember that co-pays, deductibles, and prescription drugs can change your overall cost. If you have employees that take expensive prescription drugs or have a lot of employees with families, you may want to find a plan that offers significant drug cost savings. You may want to also offer a high-deductible, low-premium option as well, for those who are typically healthy and rarely go to the doctor. Having plans for all of your employees makes them feel included and considered.
Use an insurance broker
Brokers are typically paid by the insurance companies, so there aren't any out of pocket costs associated. Brokers do the job for you and compare plans and find the one that best meets your money constraints and needs. Additionally, brokers are familiar with all of the options across the market and can make great suggestions and provide insight into the best solution for your small business's needs.
Capitalize on group rates
If you are associated with a professional association or trade group that offers group insurance rates, you may be able to purchase your small business's insurance through them (at a group rate/).
If you have a big deductible or pay a percentage of costs, the cost of services definitely matters. If you do not need to change your insurance quickly, take the time to call and get quotes. Perform internet searches that not only give you an idea of how much everything costs, but what offerings are available - a lot of times it's a lot more than you think. The best part about hopping on a call regarding rates is that you can barter - try to negotiate discounts or find ways to cut "sign-on fees".
You may think that when your small business's new annual premium arrives, it's set in stone. But it's not. Having a more sustainable-sized small business often has more leverage than you think. By negotiating your rates, you are not only learning about what each of your plans covers and why the rates are where they are, but you show your insurance company that you're not going to be taken advantage of and will get the best rate for your business.
Offer your employees an HSA
If your small business's health insurance requires a high-deductible health plan, you may want to offer healthcare savings accounts (offerings are available based on what insurance your employees choose/). Having pre-tax money set aside just in case you're hit with a huge expense alleviates a lot of stress.
Join the SHOP Exchange
Small businesses with 50 or fewer "full-time equivalent employees" under the Affordable Care Act (ACA/) can turn to the Small Business Health Options (SHOP/) Exchange. SHOP is a federal or state-run marketplace where small businesses can shop for small-business plans. You can enroll at any time of year, and your small business is able to define the amount of money you want to contribute to premiums and allow your employees to select from dental and health plans. Essentially, your employees get what they want for what they want to pay.
Also, your business may be able to qualify for tax credits when purchasing insurance from the SHOP. Credits are structured so smaller businesses (10 employees or fewer/) can qualify for the greatest credits (but firms with 25 or fewer employees may also qualify/). To qualify, your employee's average salary must make $50,000 or less. If your business meets these criteria and covers at least 50% of the premium for an individual employee, you can get up to 50% of the premium back, which could mean significant savings. Also, tax relief is associated with these credits.
Research direct primary care options
With the rise of healthcare rates, primary care providers are partnering with businesses to offer affordable, preventative, and primary care on a fixed-monthly membership, aka direct primary care. Direct primary care providers charge a monthly fee for unrestricted access to the partnering doctor. This is not a concierge practice (also charge a monthly fee/), and direct providers do not bill insurers or use Medicare for medical visits.
The main downside of direct primary care is typically isn't a solution on its own for employees who have intense illnesses, such as cancer, so you may want to couple this option with a high-deductible health insurance plan. This combination can provide a relatively affordable solution for your small business.
Find a healthcare-sharing ministry
Healthcare-sharing ministries are organizations whose members share a common set of ethical and religious beliefs. These members share medical expenses among themselves based on these beliefs. Your small business can offer employees health ministry benefits and a health reimbursement rearrangement for a membership fee.
Tip: Get a good tax accountant who can help you understand how your taxes are affected based on IRS notice 2013-54, and how to integrate an HRA into your business's plan.
These ministries will typically charge $45 to $150 per month for a single employee. Two-parent family memberships on average range from $135 to $450.
No matter the decision you make for your small business's healthcare coverage, make sure you take into consideration, more than anything, the needs of your employees. Prices will fluctuate based on coverage, but if you know what you're looking for and the window of the price you can spend, you can optimize your health insurance coverage with extra time and research.
Looking to fund up-front business health insurance costs?
If you find yourself needing to find funding for your business, First Union Lending is here to help.
We have nine different business loan types to choose from. This means that we're uniquely qualified to help you find the perfect loan to open your small business.
Applying for a business loan doesn't affect your credit. Better yet, your business loan may be approved as soon as the same day.
To discuss our business loans with one of our lending experts, click here or call 863-825-5626. We'll talk about our various business loans and help you find the right one for your medical practice.
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