How Employers Can Cut Costs While Still Maintaining Great Coverage

Posted by on Aug 21, 2016 in Uncategorized | 0 comments

How Employers Can Cut Costs While Still Maintaining Great Coverage

Having a robust employee benefits package can make a big difference between a talented employee choosing to work with you or a more established competitor. However, with the cost of health benefits rising every year, it gets harder to provide a coverage package that can attract, motivate, and retain talented workers. According to a survey conducted by the Kaiser Family Foundation, the health insurance cover is at $16, 834 for families and $6,025 for individuals annually.
Many small businesses are unable to provide health coverage due to the high insurance premiums. According to the Bureau of Labor and Statistics, only 57% of employees in firms that have less than a 100 employees are covered by an employer-sponsored healthcare cover. A survey that was conducted by the Bank of America proved that more than 72% of small business owners were concerned about the increasing healthcare costs.
With knowledge and preparation, you can create a win-win situation for your employees and yourself. However, you can only achieve this by meeting the needs of your employees and compete successfully for top talent. As an employer and a business owner, some of the ways you can attract talented employees and manage coverage costs include:
• Negotiating harder
• Adopt technology to reduce your administrative costs
• Change to individual plans
• Shop more for alternative insurance firms

Negotiating Harder

Most business owners think that when they receive their annual premium in the mail, they cannot negotiate. However, many firms have more leverage than they realize. Employers who have 50 to 99 employees can negotiate the health insurance premiums they receive. Some of the reasons cited by health insurers for hiking their premiums include that the company has experienced large claims or that your workers are a year older. However, if you have a good broker he or she will help you point out some factors as to why your insurer should lower the premium.

Adopt Technology to Reduce Your Administrative Costs

In a recent research, businesses that used HR technology experienced significant cost saving by using online tools such as benefits enrollment and payroll entry. Keep in mind that the cost of your annual premiums is not the only thing that causes expensive benefits. The expenses of administering the benefits should also be factored in.

Change to Individual Plans

Discontinuing your business group health insurance policy can be a hard sell to workers. However, they may be better off in case you choose to do so. According to the Kaiser Family Foundation, the average worker’s contribution to their family cover as at the year 2014 was $4,823. Therefore, if an employee with a moderate wage is contributing $5,000 annually towards the family health care that was obtained through your firm, then that employee would be better off with an individual plan purchased through the Affordable Care Act. If you choose to shift to the individual market, your employer contribution will disappear. However, if your employees qualify for subsidies you will incur less than $100 every month to cover your employee’s premiums. According to the Centers for Medicaid and Medicare Services, subsidies subtracted every month amount to $82.

Shop More for Alternative Insurance Firms

Research by the Kaiser Family Foundation indicated that less than 60% of small businesses around the country shop for insurance companies every year. However, those companies that did shop found out that they can move their carriers a third of the time. Therefore, just because your carrier gave you an increase in your premiums does not mean you will not find another career who can offer you a decrease.
There is no written requirement that you should provide a benefits package to your employees. However, if your business doesn’t have one, you risk losing your talented employees. Therefore, making an effort to understand some of the choices you have and communicating them clearly to your employees is a good step and you can cut on costs and get a better return on your investment. Ensure you talk to a professional who will deal with your health care plan and employee benefits for you.