There are many expenses you have to take into consideration when starting a small business. You need to have money for equipment, office space, and employee wages. But there are other expenses involved in retaining employees — apart from salary.
One of the most important things you can provide to your employees is health insurance. Benefits are one of the best ways to attract and retain high caliber employees. On top of that, the U.S. government grants tax credits to small businesses that provide medical coverage to their employees.
That’s all well and good, but this type of insurance is notoriously expensive. The good news is that it doesn’t have to be this way, even if you have a small budget. There are some easy ways to provide small business health insurance without breaking the bank.
Interested? Read on to learn all about how to save money on insurance!
1. Provide Health Savings Accounts
Health savings accounts are a great way for both employers and employees to save money on health insurance. That’s probably why they’re so popular among small businesses. But what are they?
These are pre-tax savings accounts that allow employees to set aside money to pay for certain medical expenses. They’re beneficial because they help lower employees’ tax brackets and cover medical expenses if necessary.
Health savings accounts go hand-in-hand with health insurance that has a high deductible (the amount the insured must pay before their insurance coverage kicks in). In order for an employee to have a health savings account, they must have insurance with a deductible of at least $1,350 for an individual or $2,700 for a family.
In the end, you have lower premiums by offering high-deductible health insurance, and your employees have a decreased tax liability and money available for medical expenses. Health savings accounts are great for people on both sides of the equation.
2. Partner with Other Small Businesses
The most expensive way to get health insurance is to purchase individual policies. As with many things, the more people for whom you purchase insurance, the lower the premiums per person. This is how large businesses are able to pay for health insurance for hundreds of employees without going bankrupt.
The problem that lots of small businesses encounter when providing insurance for their employees is that they don’t have enough people to get a big enough discount for group insurance.
Many refrain from providing coverage because they would basically be providing individual insurance for each employee. This doesn’t have to be the case, though.
One way to get around these excessive premiums is to join up with other small businesses in your area and purchase group insurance. Depending on how many other businesses you join up with, you can significantly lower your rates. You’re happy, and your employees are happy!
By the way, there’ are also options for group disability insurance. Look at you, saving all that money! We bet you want to find out more.
3. Run an Employee Wellness Program
It’s no secret that employees who are unhealthy cost significantly more to insure. One great way to help your employees improve or maintain their health is to run a corporate wellness program.
You can structure this however you want — employees can compete in teams or as individuals. Many companies take a holistic approach to wellness and allow employees to earn points for things like financial wellness and spirituality. All of these things have an impact on people’s overall health and well-being.
Place an emphasis on things like smoking cessation, weight loss, and healthy eating habits. These translate to the biggest savings on health insurance premiums.
The winning team or person usually gets some kind of reward, and everyone who participates should get some kind of recognition. That doesn’t mean you have to spend a ton of money on rewards. You can give the winner a preferred parking spot or an extra vacation day.
The possibilities are limitless.
4. Weigh Your Options
There’s no shortage of plans available. You shouldn’t settle for the first one you find.
Start by asking other small business owners what health insurance plans they provide to their employees (this is also a great opportunity to join another business’ group plan). Then look around online to see what other options are out there.
You can also hire an insurance agent to help you find the best plan for your business. Agents charge fees, but you won’t have to spend tons of time looking at plans instead of getting work done. Plus, they know what works and what doesn’t.
5. Keep It at a Minimum
If you’re low on extra cash but still want to make sure your employees have health insurance, you may need to provide pared down insurance options to them.
One way to do this is to only offer medical insurance. They’ll have to provide their own dental and vision insurance. Ultimately, health insurance is the most valuable benefit you can offer anyway.
There are several affordable dental discount plans and vision insurance plans available for individual consumers.
Still need to save? Opt for high-deductible plans since they tend to have lower premiums. These can be paired with the aforementioned health savings accounts for optimum coverage. You can also have employees who engage in high-risk behavior like smoking pay a higher premium.
Sold on Getting Small Business Health Insurance?
As a small business owner, you’re not required by the Affordable Care Act to provide health insurance if you have less than 50 employees. But just because you don’t have to it doesn’t mean you shouldn’t.
With these small business health insurance money saving tips, you’ll be able to provide insurance and retain some of the top employees. It’s a win-win!
Need more helpful information about running a small business? We’ve got you covered! Check out the rest of our blog to learn about small business marketing and more!