Health Insurance Cut Costs

Most businesses want to cut costs wherever possible, and it makes sense to start with things that cost the most–including health insurance. Rising health care costs mean rising insurance costs, and knowing how to cut insurance costs while still providing employees with adequate health care coverage can help businesses and their employees save money in the long run.

How to Cut Insurance Costs

Some of the best ways for businesses to cut insurance costs include:

  • Consider a high-deductible health plan: These plans, which include deductibles of $1,200 for individuals and $2,400 for families, offer lower monthly premiums than other plans. High-deductible plans are frequently linked to Health Savings Accounts (HSAs), where employees deposit pre-tax income that can be used toward medical expenses and deductibles.
  • Join a buying group: Small businesses are typically faced with higher costs if they seek insurance on their own. Joining an insurance buying group allows multiple businesses to negotiate lower rates as a group rather than as individual businesses, which can help cut costs. This is especially beneficial for small businesses with fewer than 50 employees.
  • Implement wellness programs: Experts estimate a whopping 70 percent of health care costs could be eliminated by making changes to lifestyle habits. Healthier employees cost less to insure, so wellness programs like weight loss seminars, smoking cessation courses and addiction recovery can not only decrease costs in the long run, but help prevent future health problems as well.
  • Look for areas to cut coverage: Consider doing away with such options as maternity benefits or vision, especially if your company culture or demographics don’t include many people who will use them.
  • Look for tax breaks: Many tax deductions and tax credits are available to employers who offer health insurance. Consult with your accountant or tax preparer to see which you qualify for; in some cases, you can deduct the entire amount of your health insurance premiums.
  • Shop around: Most people comparison shop to find the best deal when making a big purchase. Insurance is no different. Shop around for multiple quotes from different providers; in some cases, you can save 20 percent or more simply by comparing quotes from different companies.

Knowing how to cut insurance costs will benefit your business as well as your employees, saving everyone money. Researching various money-saving options and considering the needs of your employees will help you cut costs while keeping your employees happy.

Resources

Arnst, C. (n.d.). 10 ways to cut health-care costs right now. Retrieved July 6, 2010, from http://www.businessweek.com/magazine/content/09_47/b4156034717852.htm.

Gaebler Ventures (n.d.). Lowering health insurance costs. Retrieved July 9, 2010, from http://www.gaebler.com/Lowering-Health-Insurance-Costs.htm.