[aa_subtitle_display]Offering health benefits can be an important part of attracting and retaining top talent for your company, and depending on the size of your company, may be required by the Affordable Care Act. Despite their importance, benefits can be so expensive to offer that it becomes difficult for businesses to afford. Failure to offer benefits can result in a penalty from the Affordable Care Act or low morale and high turnover among employees. So if you need to offer benefits, how can you save on them?
There are many ways to save on benefits and they don’t all involve cutting the benefits your employees want and need. In fact, you may be able to keep great parts of benefits simply by shopping around. Changing carriers can save money, but it takes a lot of research to make sure that you know what you’re getting into. Consider using a health insurance broker to map out different plans and to get you a better deal from insurance carriers. Another way to get a better deal is to partner with a professional employment organization (PEO.) PEOs are co-employers, so they employ your staff on paper. This way, they have a large pool of employees (made up of all of their clients’ employees.) With a large group of employees, PEOs have more buying power and qualify for discounted group plans. As part of a PEO, you can enjoy these lower rates on great plans.
Implementing a wellness plan can also save on health insurance premiums. Programs that help employees to quit smoking, lose weight, eat healthy, and get more active can help them to score better on health assessments, which leads to lower insurance premiums (as well as fewer health care claims as employees prevent or control chronic diseases.)
Companies can also save money by changing to a self-funded health plan. Instead of using a traditional carrier, the company sets and collects premiums from its employees and pays for medical expenses as they happen. Companies set the premiums and the policies, so you can adapt it to your employees’ needs and wants. If your company has a young, healthy workforce with few medical claims, this type of plan could save a lot of money. Companies with self-funded plans get stop-loss insurance to cover them in case of massive expenses. Some PEOs offer self-funded health plans if you are not ready to establish one for your company. Talk to a PEO broker about finding a PEO with a self-funded plan to see if they can save you even more money than a PEO with a fully insured plan.
Many companies have decided to shift costs to their employees. The Affordable Care Act has minimums that must be met for a plan to qualify as both affordable and comprehensive enough. Many employers are choosing plans that cover just this minimum, so they have higher deductibles, copayment, and out-of-pocket maximums. This could be tough on your employees because these more expensive plans with less coverage will make them ineligible for tax credits for more affordable individual health insurance.
Don’t cut benefits when you need to cut company spending; instead, find ways to save on health benefits so that your company and your employees all get a great deal.