7 ways you can save money on small business health insurance. | hioscar Blog | Oscar
7 ways to save money on small business health insurance.
Small business health insurance is a big investment. Learn how to save money for everyone with these tips.
Employee Health BenefitsTips for Small Businesses
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There’s one thing we can all agree on when it comes to health insurance: it’s expensive. According to the 2019 Kaiser Family Foundation Employer Health Benefits Survey (opens in new tab), small business employers paid an average of 82% of the premium for an individual plan (an average of $5,658) and 70% of the premium for a family plan (an average of $14,035) per employee. And even with generous employer premium contributions, health insurance can cost a lot for employees, too.
As a business owner, it’s easy to feel conflicted about providing employee insurance. You have a budget to manage, and health benefits are a big line item cost. At the same time, you care about your staff’s health and want them to be protected in the event of a medical emergency.
Is it possible to offer health benefits without breaking the bank?
With a little savvy and strategy, you can keep costs down for you and your employees – and make sure everyone stays covered. Here are 7 practical ways to save money on small business health insurance:
Saving money for your business.
If you’re looking for ways to save on health plans but still provide a valuable benefit for employees, here are a few ideas.
Tip 1: Shop around.
Health insurance prices change every year. It’s always a smart idea to see what plans are available in your area for the upcoming coverage period. You may be able to save money by:
Switching to a different health insurer. Some insurers might increase their rates substantially year-over-year, while others may have a more modest increase (or even decrease their rates).
Changing to a new health plan type (like an EPO or HMO, which are usually cheaper than PPOs). EPOs have a curated network of doctors, but don’t require referrals. HMOs are usually built around a single medical system, and require referrals to see specialists. Both types of plans are able to drive cost savings with doctors and medical groups – and pass along those savings to you.
Selecting a different set of plan tiers. More options are not always helpful – studies (opens in new tab) have shown that employees often over-insure themselves when choosing between several plans.
Tip 2: Offer an HSA-compatible plan.
A Health Savings Account (HSA) is a long-term account an employee sets up to pay for their health care expenses. HSAs can only be used with specific HSA-compatible insurance plans that usually have high annual deductibles and lower monthly premiums. These types of plans can help you save on premium contributions while still providing health coverage for your employees.
Note: Coverage is subject to plan deductibles, co-payments and coinsurance. See your plan documents for details.
Saving money for your employees.
Even if you’re sponsoring health benefits for your employees, they can still end up paying a lot of money for care during the year. According to Kaiser Family Foundation's 2018 survey, 42% of small business employees had a plan deductible of $2,000 or more–which means they’re on the hook for more out-of-pocket expenses.
Tip 3: Provide a solid set of plan options.
Healthy employees who don’t go to the doctor often can save money with a lower premium, higher deductible plan. Others who have ongoing health needs can save money by opting for a higher premium, lower deductible plan. Make sure to provide a variety of plan options so everyone can get the coverage they need (without paying for what they won’t use).
Ideally, every plan option should include benefits that fit into your employees’ lives – like wellness rewards, behavioral health benefits, telemedicine, free annual physicals and flu shots, low-cost prescriptions, and dedicated service experts to keep them happier, healthier, and more productive year-round – and delivers cost-savings that help you care for your business and your budget.
Tip 4: Educate your employees on health insurance.
If you don’t understand how insurance works, it’s easy to make costly mistakes in choosing and using your plan. Educating employees on how health insurance works is a low-cost way to help them save.
Education can take a variety of different forms, including:
In-office training leading up to Open Enrollment.
Easy-to-understand plan and benefits materials from your insurer.
Monthly or bi-monthly emails with educational health insurance content.
An in-house or external insurance guru employees can go to with questions. This could be your HR administrator, an insurance broker, or someone else.
Tip 5: Get smart about FSAs.
Employees can set aside money to pay for health care through a Flexible Spending Account (FSA) you set up. They can put in money pre-tax from their paycheck, and decide what health care bills to pay from their account throughout the year.
During Open Enrollment, give your employees a chance to opt into a FSA, and remind your staff to use their FSA dollars before they expire at the end of the plan year!
Tip 6: Look for virtual care solutions.
Many health plans now include virtual care solutions like telemedicine options that are low-cost or even offered at no additional cost to you, and let you talk to a doctor by phone or video instead of visiting a clinic in person. For routine medical issues such as colds, rashes, UTIs, and pink eye, telemedicine is a great way to get treatment from a medical professional while saving time and money.
Saving money for everyone.
Bonus tip:
Both employers and employees win when everyone in the company stays healthy. That’s why 84% of large companies (opens in new tab) (200+ employees) invested in wellness programs in 2018.
Wellness programs encompass everything from quitting smoking to losing weight to staying active to managing stress. You can incentivize employee participation with a little friendly competition. Just figure out what works best for your business.
Looking for money-saving health insurance options? We can help. To learn more about our plans visit hioscar.com/business/cigna (opens in new tab), call our team directly at 1-855-672-2784, or talk to your broker about us.
