Health Insurance Tips for Small Business Owners

There are plenty of health insurance providers out there, so it will require some research

Over the last decade, changes in healthcare law and technology have informed and changed the way consumers shop for and use health insurance.

For business owners, it is important to stay abreast of the changes in the healthcare marketplace and the prevailing consumer dynamics, if we want to provide the most competitive and cost-effective healthcare options to our employees.

One of the biggest shifts

One of the biggest shifts in healthcare is a movement that advocates transparency in healthcare costs and greater involvement by patients in their own healthcare decisions. It’s called “healthcare consumerism” and it is slowly changing the old mindset of doing exactly what your doctor tells you to a new culture of consumer choice.

Healthcare consumerism IS healthcare empowerment and requires a ‘transfer of knowledge’ so patients become more educated in the use of their healthcare dollars, more active in the decision-making process and more focused on the outcomes they’ll receive for their expenditures.

Luckily, there are plenty of health insurance providers out there, so it will require some research to find the best option for your employees and your business, but with a little time and a little help from google, you’ll find most, if not all, the information you’ll need. To help you get started, here are some tips to keep handy when you begin your research.

Traditional plans:

These generally cover some or most of the expenses associated with hospital stays, medical tests and procedures, prescription drugs and other healthcare services that will vary from plan to plan. Traditional health plans typically allow patients to visit any healthcare provider and any hospital.

Employees will be required to pay a deductible before coverage begins and a percentage of their medical costs thereafter.

A no-, or low-deductible option

If you decide to go with a no-, or low-deductible option, then your business and/or employees will be required to pay higher monthly premiums. The benefit here is that usually, this means lower out-of-pocket expenses for the patients at the time of service.

However, if you decide to go with a high-deductible plan option (with or without co-pay), then you can benefit from lower monthly premiums. This creates an opportunity to take advantage of programs and incentives that will reduce the tax burden on your business.

It will allow you to offer pre-tax medical saving programs to your employees in the form of Health Savings Accounts (HSAs). High-deductible plans tend to work best for a younger and healthier population.

As an example, at my previous employer, we offered a high-deductible plan to our staff, and I created a Wellness Program that paid $500/year towards medical expenses to every employee that fulfilled the program requirements, eg., completed an annual physical, enrolled in a smoking cessation program, conducted a mammogram, etc.

This Wellness Program was a great way to encourage healthy behavior among our employees and provided financial benefits to our company and our employees in the process.

Next: Professional Employer Organizations (PEOs)