Sometimes a small business owner evaluates coverage options and decides that none are affordable, especially considering that the costs will likely increase each year. If you’re way off your target budget, it may not be the right time to purchase group coverage. If you’re in the ballpark, however, there may be ways to shave costs and get closer to your target. Try one of these solutions:
- Change plan benefits. If the plans you’re considering have rich benefits, consider more basic catastrophic-type plans.
- Increase employees’ share of the cost. Remember, most insurers will require your business to cover at least 50%of the employee-only premium. But if you originally planned to pay a larger share, you may have some leeway to reduce your costs.
- Offer a health savings account (HSA) with a high-deductible plan. High-deductible plans are often significantly cheaper than standard plans. Employers can establish HSAs for employees, funded with pre-tax dollars from their paychecks, which then can be used to pay for medical expenses until the plan deductible is reached (often $2,500 or so). An agent or broker can help you evaluate whether this approach is feasible for your business.