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Las Vegas Insurance
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5 Ways to Reduce Small Business Health Insurance Costs ©2008
In 2006, the average monthly cost for health insurance for small group plans, which are largely used by small businesses, was $311 a month for an employee. And the average premium for a family of four was $814 per month. Those costs have proven too high for many small businesses. According to the U.S. Chamber of Commerce, more than 45 million Americans are uninsured, and approximately 60 percent of the uninsured are employed by small businesses. Small business health insurance may take a huge chunk out of your revenue, but benefits often attract better employees and help retain existing workers. Satisfied, healthy employees are more likely to help your business grow. If you're struggling to provide health insurance, here are some tips that could reduce your small business health insurance costs. 1. Keep employees healthy. Motorola Inc., for example, has instituted a comprehensive wellness program that includes disease management for afflictions such as asthma and diabetes, as well as offering flu shots, smoking-cessation sessions and a round-the-clock phone line staffed by nurses. The company found that for every dollar it invested, it saved $3.93. Such wellness programs don’t just keep company accountants happy. They’re also popular with workers. 2. Increase Deductibles or Co-pays. Increasing a deductible from 500 to 1000 or increasing a doctor visit co-pay can reduce the premiums. According to a chamber of commerce survey, employees would be willing to enroll into a plan with higher deductibles in exchange for more affordable coverage. 3. Consider health savings accounts. Health savings accounts are an increasingly popular option for owners of small businesses. These tax-exempt accounts, which are used to pay for certain medical expenses, could reduce your small business health insurance costs while giving your employees tax breaks. 4. Offer Section 125 plans. Section 125 “cafeteria plans” can help business owners and employees alike trim considerable sums from their tax bills. Under Section 125 of the Internal Revenue Code, workers are permitted to withhold a portion of their pre-tax salaries to pay for premium contributions to employer-sponsored insurance plans and to cover qualifying unreimbursed medical and dependent care expenses. Because Section 125 benefits are not subject to FICA or income taxes, cafeteria plans can help employees lower their taxable income, while reducing the payroll and workers compensation tax liabilities of their employers. 5. Shop around. Shopping around for different providers could reduce your small business health insurance costs. Start by confirming that your broker is providing you quotes from all available carriers. Question - Does Workers Compensation Cover The Owner of a Business? If the business is a sole proprietor or partnership then most policies exclude the owner or partners unless they ask for coverage. This is coverage would need to be requested in writing. If the business is an C Corp and has officers and directors then the officers and directors would be included unless the ask to be excluded from coverage in writing. This information if cursory and your situation may be different. Please check with your insurance broker, insurance carrier, or attorney for a complete explanation of your situation.
Email the author directly at
rock@brockrock.com if you have any questions or comments. Note: Articles are copyrighted and the exclusive property of the author Rock Rocheleau. They may be copied or reproduced by non-competitors only in their entirety with no modifications, including the source and byline, and distributed without charge or financial gain. |
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