How To Control Small Business Group Insurance Costs

The rising cost of small business group insurance can be a major expense for a small business. As a result, many small business owners are seeking innovative methods to reduce group insurance costs without taking away benefits. Most employees consider benefits an essential part of compensation, and reducing a benefit package may cause significant loss of talent. In order for a small business to compete, there are many small business insurance providers and consumer-driven options to cut costs. 

Small Business Insurance Providers

Small business health care insurance requires a specific model that is different than that of large firms. The cost to add an additional employee to an insurance plan is fairly low; economists call this the law of diminishing expenses. This means it costs a lot of money to add a second employee, a little less to add a third, and so on until the cost of the subsequent employee is rather low proportionally. As such, some insurance providers have developed plans that do not punish small businesses for having a small number of employees. Blue Shield small business insurance plans are very popular as a cost-effective method to get coverage from a large provider without being a large business yourself.

Adjusting an Insurance Plan

Another way to decrease the costs associated with your group insurance is to adjust the options. This means you can raise deductibles for employees so they pay more out of pocket before the insurance kicks in. You can also consider lowering policy limits. Limits and deductibles are the two largest factors in reducing premium. A final option is to change the rules regarding the type of individuals who can be claimed as dependents on your health care plan. For example, you can reduce the age of child dependents to 18 years. This means children will need to secure health care coverage through a university or through employment once they turn 18. 

Implementing Loss Control

Keeping your employees healthy can go a long way to reducing your costs. Loss control programs can teach everything from the proper way to type at a computer to fork-lift operator safety. Depending on the type of business you own, there is a loss control plan that will match your needs. Part of loss control can additionally be to encourage healthy lifestyles. Some companies elect to reimburse healthy meals from the company cafeteria; others offer incentives for employees to quit smoking. While this may sound expensive, many companies find key small business savings through a healthier, more productive workforce. 

Consumer-Driven Options

Giving your employees direct control over their health care can reduce cost. For example, you can consider offering a 50% reimbursement on health care expenses rather than offering a group health insurance plan. You can also encourage your employees to make smart decisions about using their insurance. For example, providing numbers to nurse hot lines and urgent care facilities can keep your employees out of the expensive emergency rooms for non emergency situations. Empowering your employees with the ability to make these choices will cut costs for them and your business.