Navigating the world of group health insurance can be a little daunting even for a seasoned business owner. These days, there are more options available than ever, and many of those options come with a big price tag. Choosing the right group health insurance for your business requires finding a plan that will satisfy the needs of your employees without sacrificing your bottom line. Here are some tips to do just that:
1. Only offer coverage your employees plan to use. In order to gauge the amount of coverage and type of features your group health insurance plan ought to include, you should talk to your employees about their needs. Features such as maternity coverage, mental health coverage, drug rehabilitation coverage, vision care, dental insurance and even prescription coverage may not be high on their list of priorities. Scaling back the features in your health plan will save you tons of money on your premium, and it doesn’t make sense to pay for something that your employees won’t use anyway.
2. Share premiums with your employees. Nowadays, most employers require their employees to pay a percentage of the overall premium for their group health insurance plan. How you split the premium is up to you and your finances, but a 50/50 split is generally standard. If you are unable to offer the level of coverage your employees require, you might consider decreasing your employer contribution to the plan and requiring your employees to pay a higher percentage of the premium. This is a move that should be discussed with employees, however, as it could lead to employee turnover if the cost for benefits is too high.
3. Offer employees flexible insurance options if possible. Some employees may not require the same level of coverage as other employees. Likewise, some employees may not be able to afford the employee contribution for a standard health plan. In these cases, you can save money by offering your employees the ability to choose their level of coverage. Those who require more coverage can pay a higher premium, and those who require less can pay less. Many insurance providers will allow you to choose several group health plans your employees can choose from.
4. Consider combining a High Deductible Health Plan with Health Savings Accounts (HSAs). Choosing a group health insurance plan with a high deductible will save you a lot of money in premiums, but it can make it difficult for your employees to afford routine health care. HSAs balance out that discrepancy and provided tax-free funds to pay for qualified medical expenses. You, as the employer, can deposit some or all of your premium savings into HSAs for your employees. Discuss this option with an insurance broker to determine if it’s right for your company.
5. Get a quote from your current insurer first. If you have business insurance or another form of insurance with an insurer that also offers group health insurance, get a quote from that company first. Most insurers will discount premiums for customers with multiple policies in the interest of building and maintaining a long relationship. It can also help the application process to work with an agent who is familiar with your business. Use this first quote as a basis to help determine how much coverage your business can afford to offer its employees.
6. Work with an independent insurance agent or an insurance broker to get additional quotes from other insurers. Independent insurance agents contract to work with several different insurers, and brokers can find policies from any applicable insurer. Because premiums vary significantly from insurer to insurer, you should never take the first quote you get without comparison shopping. Working with an independent agent or a broker will give you access to multiple quotes. If you only work with an agent from a direct-writer insurance company, you will not have the opportunity to shop around.
7. Take advantage of online resources. The Internet makes getting multiple quotes from different insurers remarkably easy. Often websites require you to enter all the necessary application information only one time before providing quotes from several different insurance companies. The quotes you receive are preliminary, but you can get a good idea of the standard premium each company offers for the level of coverage you choose. These websites serve the role of online insurance broker, but to purchase the policy, you will have to work with an offline broker as well.
8. Work with an accountant to maximize your tax benefits. In most cases, your employer contribution to your group health insurance plan is 100% tax deductible, but you should consult your accountant to make sure. If your employee compensation package includes the group health insurance benefits, you can get additional tax savings on your payroll taxes. Health Savings Accounts also have tax incentives you should be aware of. When determining how much group health insurance you can afford, always factor your tax savings into the equation.
9. Choose a company that offers the most convenience and accessibility to your employees. It’s not enough to provide group health insurance; you have to provide quality group health insurance. When choosing an insurer, make sure the network of health care providers is a substantial enough to suit your employee’s needs. Some insurers have limited networks that make accessing care very difficult. Likewise, look for insurers that allow members to access their account online. Most of the larger insurance companies provide this service that allows members to track claims, search for providers, look up coverage and much more.
10. Research an insurance company before buying a policy. Not all insurance companies are reliable. Check for consumer complaints at the Better Business Bureau and your state’s Department of Insurance. A.M. Best, Standard & Poor’s, and Moody’s also put out ratings for insurance companies. These ratings can help you determine if an insurer is financial viable. Providing group health insurance is a great way to attract and keep quality employees, but if the insurance company you choose is unable to process claims or provide service adequately, it could do more harm than good.