Saving Money on Employee Health Care (Without Sacrificing Coverage)
by Danny Brown on February 11th, 2008
In any business, having an employee health care scheme can make a big dent into your company’s finances. This is particularly true for small-to-medium businesses that have a number of employees, but not the huge financial backing of a large corporation. Yet it’s something that you need to have – apart from providing cover for your employees should something happen to them, it also keeps your workers happy to know they’re at a company that cares for their welfare.
However, for companies worried about the costs, there are ways to save on health care and still provide a good cover. And with the average cost of just under $9,000 per worker to be covered, any savings have to be worth it.
Look Around
At its simplest, health care is just another form of insurance. And like your car or home insurance, there are a host of companies vying for your business. Therefore, don’t assume that you’ve already got the best deal – look around and compare what’s available. Commercial insurance companies will offer great incentives to get your business, so take advantage of this.
Here are a couple of websites where you can compare group health insurance rates:
BuyerZone
eHealthInsurance.com
Offer a Health Savings Account
Another way to save on your health care costs is to set up a Health Savings Account, or a flexible spending account. This is an extremely effective way to offer comprehensive health care at a very competitive price. It’s also attractive to employees as well, because it allows them to pay for their own health care by using their pre-tax earnings. So instead of paying a hefty amount of tax on their wage, they’re actually spending it on something they will benefit from. And at just $40 per month and a set up fee that’s as little as $1,000, it’s easily within reach of a small business.
Company/Employee Incentives
Although it’s not popular with everyone, a company/employee incentive scheme tied in to the employee’s health can be another way of saving on your costs. By lowering the coverage on your employee in lieu of rewarding them for staying healthy, you can benefit in many ways. Your health care costs are down; production is up because of fewer sick days, so profits are up; and the workplace is generally a healthier and happier place.
Swap Coverage for Pay
Perhaps the least popular option, as well as the most extreme, is stopping any kind of health care altogether. While this may seem rather over-the-top, and unlikely to be agreed to, more and more companies are choosing this option. To combat the lack of healthcare, the money saved can go into paying the employee a higher wage. Surprisingly, this option seems to be well received at the companies that work this way, with many employees happy for the extra income.
This option, however, may become a thing of the past. With health care a major issue in this year’s presidential election, depending on who is elected, health insurance may become mandatory for all businesses to provide their employees.
At the end of the day, there are many ways to lower your health care costs, some more favorable than others. What you need to decide is which one is best for you, and your employees. After all, they’re the ones who’ll decide what you can afford for all of your business, and not just your health care scheme.
