The Kaiser Family Foundation reports that, in 2015 approximately 147 million people (63 percent) were covered by employer-sponsored health insurance, costing business owners roughly $12,591 per employee for family coverage for the year. This amount is up from $8,167 in 2005, highlighting the fact that employee healthcare is costing small business owners more money than ever.
Fortunately, there are some affordable healthcare options when it comes to covering employees and their families without having to break the bank, and a couple of fellow small business owners were willing to share what they’ve found. This is what they had to say.
John Kinskey, President and CEO of Access Direct says, “I use a health care reimbursement plan whereby I reimburse a significant portion of the employee’s monthly premium once they prove they have private health insurance. This makes it possible and affordable to offer a health insurance benefit in a numbers of ways:
- With a small pool of employees, the younger staff do not have to subsidize older staff as tends to be the case in a company sponsored plan; thus, younger members won’t sign up because the premiums are too high.
- Each employee can buy their own private health insurance, tailored to their desired network type, deductible, etc. And, it’s portable; they own it.
- As a small company, the administrative load of a company sponsored plan would be substantial with annual meetings with the provider, renewals, complaints, premium increases, etc. With a health care reimbursement plan, I am out of the middle, and I am also not the bad guy delivering the news of rate increases every year. Nor do I incur liability for any enrollment mistakes, etc.
- Administering a health care reimbursement plan is simple and hands-free. We use Zane Benefits to administer the program and do the reimbursement through payroll.
- The cost can be defined by how much you are willing to offer as a reimbursement, which can be a set dollar amount, not a percentage of their premium. The cost can easily be forecasted by looking at sample health plan premiums in each age group and setting dollar amount reimbursements to achieve, for example, a 70% reimbursement. One can also vary the reimbursement amount/percentage by class of employee.
The above is a win-win as, if I did not have the option of a health care reimbursement plan, I would not offer company sponsored health insurance. I have heard too many nightmare stories of administering a company sponsored health insurance plan.”
Mike Arce, CEO of Loud Rumor, has found an affordable option for his 10 employees as well. It’s called Redirect Health and he uses their EverydayCare Plan, which costs him approximately $100 per month per employee. This is what he has to say about it:
“As a small business owner, it can be extremely costly to provide our employees with the care they really need. Redirect Health provides us with an affordable solution that actually allows us to attract talent.
We can offer a level of healthcare plan that most of our competitors cannot, at least not at an affordable price. Plus, our employees have 24/7 access to care. It’s reassuring knowing that they are taken care of.”
Redirect Health is an Obamacare compliant healthcare option that involves no deductibles or co-pays, discounted drug benefits, labs, x-rays, immunizations, and more.
These are just two options that these small business owners have found to help make healthcare more affordable.
If you’ve found one that hasn’t been mentioned, feel free to share it below so other small business owners can save money on these costs too!
I’m always interested in learning other small business owners’ thoughts on relevant topics and issues, so if you have a comment or unique article idea, feel free to contact me at [email protected] (put “Businessing Magazine” in the subject line, please). If I use it, it’s a free link to your website!