The Best Ways To Control the Rising Cost of Healthcare Premiums
If you were shocked by the price of your 2021 group health plan renewal, you’re not alone—most business owners are seeing a 5% increase from last year’s premiums. However, there are a few simple steps you can take to reduce healthcare costs for you and your employees, and InSource can help you get started.
How Much Does It Cost To Give Employees Benefits?
Before you can start thinking about ways to reduce your employer contribution amount, it’s important to understand the factors that impact the price of your employee benefits package:
Coverages: The more coverages you offer, the more expensive your benefits plan will be. For example, if you provide top-tier health insurance, life insurance, and disability insurance, it will cost you far more than offering a bare-bones benefits package. However, many businesses notice increased loyalty and employee satisfaction when they offer good benefits.
Number and age of participants: Insurance companies prefer to spread out risk, which is why health insurance plans for larger groups are often cheaper per person. Plus, your younger employees can help offset higher healthcare costs for older coworkers if your employees range in age.
Plan type: Some health insurance plan types are more expensive than others. For example, health maintenance organization (HMO) plans are typically cheaper than preferred provider organization (PPO) plans because they restrict care to specified physicians.
Deductible and copayment amounts: Your employees pay specified copayments for certain types of appointments, and they must meet a certain deductible amount before their insurance starts covering large bills. If you choose a plan with low deductibles and copayments, your premium will be more expensive.
Current health climate: Unfortunately, the COVID-19 pandemic only worsened rising healthcare premiums. When hospitals spend more money researching and treating new diseases, they pass extra costs along to patients.
Small businesses with fewer than 50 employees aren’t required to offer health insurance, but they can receive tax credits for doing so. At InSource, we can help your small or large business find the right insurance plan for your budget and implement cost-saving practices.
Four Ways To Reduce the Cost of Providing Benefits to Employees
If your budget is taking a big hit each time you renew your employer health insurance plan, here are four steps you can take to combat rising costs.
1. Start an Employee Wellness Initiative
By encouraging employees to exercise, quit smoking, and eat healthy meals, your company can reduce healthcare premium costs. Healthy employees are less likely to seek expensive coverage for chronic conditions, and reduced spending directly translates to lower premiums.
2. Teach Your Employees About Their Coverage
Many employees that participate in employer-sponsored health plans don’t understand how to use their coverage. If your employees choose an out-of-network provider or visit the emergency room unnecessarily, your insurance provider will respond with increased premiums. Teaching your employees how to use their coverage is a simple way to reduce costs.
3. Switch to a Health Spending Account (HSA)
If traditional health insurance plans are too expensive for your business, but you still want to provide coverage, HSAs and flexible spending accounts (FSAs) are a good compromise. Your employees can use money from their HSAs and FSAs to cover deductibles and copayments, but once it runs out, your employees will have to pay out-of-pocket for medical bills.
4. Take Advantage of Telehealth
Though telehealth became commonplace during lockdowns, don’t expect it to go away once coronavirus restrictions are fully lifted. Telehealth appointments can be up to 70% cheaper than in-person appointments. If you want to reduce premium costs, choose a plan that allows telemedicine, and encourage your employees to schedule virtual appointments whenever possible.
Are you tired of spending more each year on the same health insurance plan? InSource can find the best plan for your budget.
Partner With InSource for Low-Cost Benefits To Offer Employees
Finding the right health insurance plan for your business is challenging, especially if you’re on a tight budget. If you’re unsure where to start, partner with InSource. Our employee benefits experts have been providing affordable benefits packages to businesses in our home state of Texas and throughout the nation for decades. We can shop around for the best medical and prescription drug coverage for your employees and help you take steps to reduce your premium.
Our team can also add extra benefits and perks to your insurance package, including affordable dental, vision, key man, disability, and life insurance. Contact us today to learn how we can give your employees the benefits they deserve at a price point that fits your budget.