Providing health-insurance benefits is key to employee retention, but rising costs can make this a challenge for small-business owners. Here are six options that may be able to help keep costs down.
1. A high-deductible health plan combined with a health savings account (HSA). This approach helps keep spending in check because it puts the onus on the user to think about cost. HSAs allow individuals with high-deductible health insurance plans to use employee pretax money to pay for uncovered medical costs and carry over unused funds to future years. You can require employees to fund the account, or fund it yourself.
Health reimbursement accounts (HRAs) are also often coupled with high-deductible insurance plans. In an HRA, employers set aside money to reimburse employees’ deductibles or qualified out-of-pocket medical expenses up to a predetermined amount. Employees can generally roll unused money over from year to year, though the money technically belongs to the employer.
2. Purchasing cooperatives. Small companies can gain bargaining power with insurers by banding together in health-insurance purchasing cooperatives. Each cooperative is structured differently, and whether it offers better insurance rates than businesses could get on the open market often depends on local insurance-underwriting laws.
One cooperative for New York City businesses, for example, offers members a choice of 35 health plans. Though the insurance itself isn’t discounted, members get extras, such as free access to health-insurance consultation and dental benefits they otherwise wouldn’t be eligible for or would have to pay a lot for on their own.
3. Company wellness programs. Wellness initiatives run the gamut from offering employees free gym memberships to providing healthy snacks in the company kitchen and health screenings that can result in lower insurance payments for employees.
These programs can help lower a company’s insurance costs by creating more health awareness among employees and thus encourage them to take better care of themselves. A growing crop of programs is also available online. Such services, for example, may offer customized nutrition advice, meal-planning tools and fitness plans, and cost just a few dollars per employee per month.
4. Flexible-spending debit cards. Flexible-spending accounts(FSAs) allow workers to pay for medical expenses that aren’t covered by health insurance with pretax dollars.
Employees can use the specialized debit cards to pay for co-pays or over-the-counter medication not covered by their insurer. The money is automatically deducted from the pretax funds employees have set aside. The cards typically cost $1 or $2 per month per employee, but some FSA vendors package them into their offerings.
5. Disease management. Disease management aims to minimize the effects of a disease, usually a chronic illness or condition, such as diabetes or asthma, through screenings and preventive care. One employee’s extended hospital stay or major health complication can be a huge financial burden for a small company with limited financial resources. To prevent such expenses, some small businesses are adopting disease-management programs staffed by nurses who work with employees to better manage and treat their chronic illnesses. Some insurers offer this service, or you can find it offered through third-party providers.
6. Nurse hot lines. Unnecessary emergency room and urgent care-center visits by employees are an expensive cost to employers. Curb these costs by asking workers with minor medical issues and questions to call a nurse first. Nurse hot-line programs are often sold through insurers and benefits administrators or to businesses directly.
Posted in: Hiring & Managing Employees