How to Combat Rising Health Costs

Even people who have never heard of GEICO know that health care costs have been skyrocketing over the last few years. With the implementation of the Affordable Care Act, many companies may see a further increase in their premiums. Although escalating health care expenditures is a worrying issue for both small and large businesses, these rising expenses are more likely to be detrimental to the “health” of smaller companies.

So what can you do to rein in healthcare costs? Here are a few suggestions that might prove to be useful.

Encourage Individual Health Insurance

One of the options available to small business owners is to encourage their employees to get individual health insurance. Shifting this cost to the employee can be quite beneficial since, on average, individual premiums are cheaper than group plan premiums.

Provide Reimbursement of Insurance Premiums

As an employer, you could reimburse some of the costs or help your employees in handling their Section 125 deduction. This method could prove to be instrumental in reducing your expenditure on health care.

Offer Section 105 Plans

Section 105 plans allow you, as an employer, to buy higher deductible, lower cost, insurance coverage for your employees. The high-deductible is offset through an employer-controlled tax advantage fund that results in savings for both the employer and the employee. Claims by the employees below the deductible are met through this fund.

Other Benefits

Alternatively, you can offer other benefits to keep your employees from getting poached by larger companies that can afford better healthcare. Taking care of your employees’ happiness is almost as important as taking care of their health, and through customized benefit packages, you can actually do both, in an affordable way.

Most workforces consist of people from multiple generations, each with their own set of requirements and priorities. To meet such widely varying desires, it helps to create flexible packages of perks that will attract and retain talented employees from each generation and meet their unique needs. While creating customized benefit packages, you could take into account various areas of your employees’ lives, and model the packages accordingly.

Offering benefits such as time off, elder and child care, or work-from-home facilities can greatly enhance the quality of an employee’s life and make the time he or she spends away from the office enjoyable and relaxing. Other than insurance, consider wellness programs and gym memberships, as they can go a long way in safeguarding your employees’ health. According to a recent Harvard study, incorporating a workplace wellness program can yield a return on investment of more than 3-to-1 on health care cost reduction, while at the same time reducing absence-related costs.

You could also offer work benefits such as career visibility, mentorship and professional memberships, along with financial perks like savings accounts, financial advice and retirement contributions.

Some of the Best Things in Life Are Free or Cheap

You don’t need to spend a fortune to offer perks, as not every benefit needs to be large or permanent. An occasional pizza party or a gift card can go a long way in building employee loyalty. If possible, you could also allow your employees to customize their benefits packages, as not all people value the same things – even when they belong to the same generation.

So the next time your employee asks for a few hours off in order to watch his son playing basketball for the school team, think twice before you say no.