| Saving on your small business health insurance can | | | | the potential for a small number of doctor's visits |
| be a challenge. But there are ways to overcome | | | | to cost thousands, these plans can become |
| the financial obstacles and get the coverage | | | | incredibly expensive. |
| necessary for your business. There are two | | | | Flexible Spending Account (FSA) |
| major benefits of employer-based coverage. First | | | | A flexible spending account is a savings account |
| these plans, although expensive, usually carry the | | | | to be used for medical expenses, and is funded |
| best all around protection for you and your | | | | by pre-tax dollars. Using pre-tax dollars means |
| employees. Second, providing benefits plays a key | | | | that your employees will actually show that they |
| role in attracting and retaining quality employees. | | | | have less income, and will therefore have less |
| Why is coverage for small businesses so much | | | | taxes withheld. As an employer, you set the limit |
| more than for large corporations? | | | | on contributions to the account per year. In |
| Health insurance for small businesses cost so | | | | addition to the employee contribution, you can |
| much because of the high quality coverage | | | | also credit the account, or fund it completely |
| concentrated among a small group of people. | | | | from your general assets. |
| Every individual within the group represents a | | | | An FSA, especially if combined with an HDHP, can |
| different level of financial risk to an insurance | | | | significantly reduce the costs of small business |
| company, and this risk is added up and spread out | | | | health insurance. |
| among the group. Large corporations pay | | | | You should be forewarned, money from FSA |
| considerably less because the risk is spread to | | | | accounts cannot be rolled over. They are, |
| such a large group, where small business owners | | | | however, available to use for two years and two |
| can see unreasonably high increases in premiums | | | | and half months after the benefit year. A |
| due to one or two members. Small businesses | | | | terminated employee won't be able to use |
| also have to insure their employees under state | | | | leftover funds, unless there is a positive remaining |
| mandates, which can require the policies to cover | | | | balance and COBRA is elected. |
| some specific health conditions and treatments. | | | | Small business health insurance providers have |
| Large corporations' policies are under federal law, | | | | made significant improvements in their services to |
| usually self-insured, and with fewer mandated | | | | simplify the administration of your plan. With |
| benefits. The Erisa Act of 1974 officially | | | | HRAs, FSAs, and HSAs, your employees can use |
| exempted self-funded insurance policies from | | | | debit cards for medical transactions. Be sure to |
| state mandates, lessening the financial burdens of | | | | research this thoroughly. You will want to be sure |
| larger firms. | | | | your debit card plan is IRS compliant, and that |
| Isn't the Health Care Reform Bill going to fix this? | | | | you can use a large number of pharmacies. You |
| This remains to be seen. There will be benefits | | | | should also pick a plan that can verify eligibility on |
| for small business owners in the form of | | | | the spot. Talk with your agent about linking |
| insurance exchanges, pools, tax credits, subsidies | | | | transit, parking fees, and prescriptions to the |
| etc. But you can't rely on a bill that is still in the | | | | same card. When picking the debit card options, |
| works, and you can't wait for a bill where the | | | | please be sure to clarify the details of the |
| policies set forth won't take effect until about | | | | substantion process. This is IMPORTANT! With |
| 2013. Additionally, the bill will help you with costs, | | | | other plans, the provider may assign someone to |
| but still won't prevent those costs from continually | | | | manage your plan. Or you may have to hire |
| rising. You, as a business owner, will need to be | | | | someone. Still, you should be able to login to your |
| fully aware of what you can do to maintain your | | | | account and print insurance cards, important |
| bottom line. | | | | papers etc. |
| What can I do? | | | | The next thing you can do is thoroughly assess |
| First you need to understand the plan options out | | | | your needs. Being that every member of your |
| there. So here they are. | | | | small business plays a key role in its success, it is |
| PPO | | | | vital that their needs are met. And understanding |
| A preferred provider option (PPO) is a plan where | | | | these needs is crucial to finding the right plan. Find |
| your insurance provider uses a network of | | | | out about chronic illnesses, and additional |
| doctors and specialists. Whoever provides your | | | | information related to past health issues. Know |
| care will file the claim with your insurance | | | | what your employees think about health |
| provider, and you pay the co-pay. | | | | insurance, and get them involved in the process. |
| Who am I allowed to visit? | | | | Hiring an agent or a broker |
| Your provider will cover any visit to a doctor or | | | | Finding and understanding small business health |
| specialist within their network. Any care you seek | | | | insurance can be a daunting task. While some |
| outside the network will not be covered. Unlike an | | | | choose to go it alone, others need some |
| HMO, you don't have to get your chosen doctor | | | | professional assistance. You need to understand |
| registered or approved by your PPO provider. To | | | | the difference between an agent and a broker, |
| find out which doctors are in your network, | | | | and how you can get the most from either of |
| simply ask your doctor's office or visit your | | | | them. |
| insurance company's website. | | | | A broker |
| Where Can I Get it? | | | | Brokers function independently and usually work |
| Most providers offer it as an option in your plan. | | | | for several different companies. Since they have |
| Your employees will have the option to get it | | | | a variety of resources, they can usually provide |
| when they sign their employment paperwork. | | | | more options and a better overall view of the |
| They generally decide on their elections during the | | | | marketplace. Brokers will assist you by evaluating |
| open enrollment period, because altering the plan | | | | the costs and designs of plans from your local |
| after this time period won't be easy. | | | | major carriers. The cost isn't everything, you |
| And Finally, What Does It Cover? | | | | want to get the coverage that you need. |
| Any basic office visit, within the network that is, | | | | Ask the broker how he or she is getting paid for |
| will be covered under the PPO insurance. There | | | | their services. They should readily divulge that |
| will be the standard co-pay, and dependent upon | | | | information. Some brokers may charge you a flat |
| your particular plan, other types of care may be | | | | free. Some receive a fee from an employer, |
| covered. The reimbursement for emergency | | | | while others receive a commission from the |
| room visits generally range from sixty to seventy | | | | insurance provider. Any commissions could be |
| percent of the total costs. And if it is necessary | | | | reflected in your premiums, but not to the point |
| for you to be hospitalized, there could be a | | | | that you should worry. |
| change in the reimbursement. Visits to specialists | | | | An agent |
| will be covered, but you will need a referral from | | | | Agents typically provide services for one |
| your doctor, and the specialist must be within the | | | | company. They have a closer relationship to the |
| network. | | | | insurance company than a broker would, giving |
| A PPO is an expensive, yet flexible option for | | | | them more leverage to make alterations to your |
| your small business health insurance. It provides | | | | plan. In some cases they can offer a particular |
| great coverage though, and you should inquire | | | | plan for less than a broker, and may have access |
| with your provider to find out how you can | | | | to additional services like worker's compensation. |
| reduce the costs. | | | | To find out what different providers have to |
| HMO (Health Maintenance Organization) | | | | offer, talk to more than one agent. It may be |
| Health Maintenance Organizations (HMOs) are the | | | | time-consuming, but it could bring you closer to |
| most popular small business health insurance plans. | | | | the most cost-effective solution for your small |
| Under an HMO plan you will have to register your | | | | business health insurance. |
| primary care physician, as well as any referred | | | | One of the common options presented by agents |
| specialists and physicians. Plan participants are free | | | | is the employee-elect option. This is an |
| to choose specialists and medical groups as long | | | | arrangement where employees pick the plan they |
| as they are covered under the plan. And because | | | | prefer. Those who don't need as much coverage |
| HMOs are geographically driven, the options may | | | | won't be forced to pay so much, and those who |
| be limited outside of a specific area. | | | | do need it can get it without increasing the |
| Health maintenance organizations help to contain | | | | financial burden of the company as a whole. |
| employer's costs by using a wide variety of | | | | How to Save On Your Small Business Health |
| prevention methods like wellness programs, nurse | | | | Insurance Plan |
| hotlines, physicals, and baby-care to name a few. | | | | What's important to remember is that there really |
| Placing a heavy emphasis on prevention cuts | | | | is no inexpensive solution to health care. Even if |
| costs by stopping unnecessary visits and medical | | | | your initial premiums are reasonably low, they |
| procedures. | | | | could rise significantly at your next renewal. So |
| When someone does fall ill, however, the | | | | saving money on small business health insurance is |
| insurance provider manages care by working with | | | | about doing a combination of things simultaneously |
| health care providers to figure out what | | | | to get good rates, and to then maintain those |
| procedures are necessary. Usually a patient will be | | | | rates.. And it will require a consistent effort from |
| required to have pre-certification for surgical | | | | you, your employees, and your insurance |
| procedures that aren't considered essential, or | | | | provider. |
| that may be harmful. | | | | First, you can save yourself money by reading |
| HMOs are less expensive than PPOs, and this | | | | the fine print. You need to know exactly what |
| preventative approach to health care theoretically | | | | your plan does and DOESN'T cover. There are |
| does keep costs down. The downside, however, | | | | also state mandated coverages. For example, in |
| is that employees may not pursue help when it is | | | | states like Illinois, your insurance must cover |
| needed for fear of denial. That aside, it is a | | | | mammograms. Also, understanding the ins and |
| popular and affordable plan for your small business | | | | outs of your plan will give you and your |
| health insurance. | | | | employees a better idea of how to deal with your |
| POS (Point of Service) | | | | insurance. |
| A Point of Service plan is a managed care | | | | Next, you should shave unnecessary benefits. |
| insurance similar to both an HMO and a PPO. POS | | | | After reading all about your plan, you will find |
| plans require members to pick a primary health | | | | coverage for things you may not need. Eliminating |
| care provider. In order to get reimbursed for | | | | these benefits can significantly drop monthly small |
| out-of-network visits, you will need to have a | | | | business health insurance premiums. For example, |
| referral from the primary provider. If you don't, | | | | eliminating coverage for brand name medications |
| however, your reimbursement for the visit could | | | | can reduce costs by more than 25 percent. |
| be substantially less. Out-of-network visits will also | | | | Wellness program have worked wonders for small |
| require you to handle the paperwork, meaning | | | | businesses. A wellness program is any program |
| submit the claim to the insurance provider. | | | | designed to promote healthy living within the |
| POSs provide more freedom and flexibility than | | | | organization. Weight loss competitions benefit |
| HMOs. But this increased freedom results in higher | | | | every participant. Add a financial incentive for |
| premiums. Also, this type of plan can put a strain | | | | further motivation. Stock the work fridge with |
| on employee finances when non-network visits | | | | water, and leave literature about healthy living |
| start to pile up. Assess your needs and weigh all | | | | lying around. Search the internet for calorie |
| your options before making a decision. | | | | counting charts. Raising awareness entice workers |
| EPO | | | | to make positive changes. Active, exercising, |
| An Exclusive Provider Organization Plan is another | | | | diet-conscious employees have stronger immune |
| network-based managed care plan. Members of | | | | systems, more vitality, and more productive |
| this plan must choose from a health care provider | | | | workplaces. They also don't deal with as many |
| within the network, but exceptions can be made | | | | health issues. Fewer doctor visits and |
| due to medical emergencies. Like HMOs, EPOs | | | | hospitilizations will help maintain lower annual |
| focus on preventative care and healthy living. And | | | | premiums, because it will prove to your insurance |
| price wise, they fall between HMOs and PPOs. | | | | provider that your business is a low financial risk. |
| The differences between an EPO and the other | | | | Increasing your co-pay and deductible can go a |
| two organization plans are small, but important. | | | | long way towards cutting costs. For instance, |
| While certain HMO and PPO plans offer | | | | raising co-pays by just ten dollars has saved |
| reimbursement for out-of-network usage, an EPO | | | | companies as much as thirteen percent on their |
| does not allow its members to file a claim for | | | | premiums. A higher deductible will significantly |
| doctor visits out its network. EPO plans are more | | | | reduce your monthly premium. To lessen the |
| restrictive in this respect, but are also able to | | | | financial burden of high-deductible health plans |
| negotiate lower fees by guaranteeing health care | | | | (HDHPs), combine them with an HSA. |
| providers that it's members will use in-network | | | | Combinations like these have saved both business |
| doctors. These plans are also negotiated on a | | | | owners and employees bundles of cash. |
| fee-for-services basis, whereas HMOs are on a | | | | Check into getting a nurse hotline. A nurse hotline |
| per-person basis. | | | | is a toll free, 24-hour-a-day, seven-day-a-week |
| HSA (Health Savings Account) | | | | service. Employees can get medical advice from |
| An HSA is a tax-advantaged account used to pay | | | | qualified, registered nurses. This method has |
| existing and future medical expenses. HSAs are | | | | deterred a large number of people from |
| used in conjunction with high-deductible health | | | | emergency visits, and it can also be used for |
| plans (HDHP), which will make some with | | | | preventative care as well. Insurers like Nationwide |
| pre-existing conditions ineligible. Also, HSAs must | | | | have them, or you may have to purchase from a |
| be funded with cash. Communicating the terms of | | | | third-party provider. |
| this account to your employees is important, as a | | | | Increase the size of your group to reduce your |
| large number of HSAs are underfunded or | | | | monthly small business health insurance premiums. |
| improperly funded. The health savings accounts | | | | In a survey by America's Health Insurance Plans, |
| were signed into the law by George Bush in 2003, | | | | small businesses who employed ten people or less |
| and have become an affordable alternative to a | | | | paid forty three more dollars on average than |
| group health plan. | | | | businesses with twenty six to fifty employees. |
| When inquiring about an HSA, there will be a few | | | | Check around with other businesses owners, or |
| things you will want to clarify. While HSAs | | | | fellow members of business organizations. Some |
| generally cover routine medical expenses and | | | | states also have small business groups and pools |
| copays, some can provide dental and vision care | | | | for this purpose. Check with your state Chamber |
| as well. And since HSAs can be combined with | | | | of Commerce and Department of Insurance. |
| certain compatible plans, it is important to | | | | Beware of heavily discounted plans. First, there |
| understand how money from the account will be | | | | are numerous scammers trying to get your |
| allocated. And finally, you will want to know about | | | | money. They promise low rates, and usually |
| cashing out your HSA balance. The amount is | | | | cover little to nothing at all. The internet is |
| taxable and could be subject to a ten percent | | | | notorious for swindlers trying to hustle you out of |
| excise tax. | | | | a buck. If you are going with a company you |
| HRA (Health Reimbursement Arrangement) | | | | aren't familiar with, please do your research. On |
| An HRA is exactly what it sounds like. The | | | | another note, even reputable companies present |
| employer reimburses the employee for health | | | | problems. In an attempt to gain market share, |
| care. As an employer, you will usually have the | | | | Blue Cross offered small businesses discounted |
| option to contribute to a reimbursement fund, or | | | | rates in 2008. For 2009, some of these same |
| to pay fees as they are incurred. These | | | | businesses were set to see increases of as much |
| reimbursements can be deducted from your | | | | as 47% in their premiums. As the costs of |
| taxes, and are tax-free for your employees, | | | | medical care increases, the costs are shifted from |
| saving you both money. | | | | the insurer to the insured, and discount plans |
| Some providers empower employers by giving | | | | become overpriced plans quickly. |
| them more options. HRAs, unlike HSAs, don't | | | | Shop around. As mentioned before, talking to |
| have to be funded with cash money, placing a | | | | different agents will expose you to the best that |
| book keeping entry on your balance sheet is | | | | insurance providers have to offer. Ask other small |
| enough. You can usually control aspects of your | | | | business owners about their providers. You can |
| arrangement such as reimbursement limits, | | | | use trusted online resources like Netquote and |
| whether you or your employee pays first, and if | | | | Ehealthinsurance to shop around instantly. These |
| the previous year's funds roll over. | | | | services also let you compare plans side by side, |
| HRAs are becoming a more popular option | | | | and allow you to purchase your plan online. Even |
| because of the control it has given small | | | | after you get your initial plan, it's good to annually |
| businesses. Combined with a high deductible health | | | | reevaluate your coverage. This will keep you on |
| plan (HDHP), an HRA could be the most | | | | the up-and-up about what the market is offering. |
| cost-effective solution to your small business | | | | Keeping costs down is an ongoing effort, |
| health insurance problems. It's always best to | | | | especially with rates and plans changing all the |
| compare these plans to PPOs, HMOs, and EPOs to | | | | time from company to company. |
| know what works best. | | | | Share some of the costs with your employees. |
| Fee for Service (FFS) or Traditional Indemnity | | | | Raising employee contributions isn't a popular |
| A fee for service plan is the most flexible small | | | | option, but it may be one of the only ways to |
| business health insurance option. You choose your | | | | absorb costs and maintain small business health |
| doctor, and your hospital. You can see a specialist | | | | insurance coverage. Communicate with your |
| without a referral. This flexibility, however, comes | | | | employees about how to keep costs down, and |
| with more out-of-pocket expenses and higher | | | | remind them that their increase is your increase |
| insurance premiums. | | | | as well. |
| The typical FFS plan has a deductible ranging | | | | The sad truth is that, no matter how many |
| anywhere from five to fifteen hundred dollars. | | | | cost-cutting methods you apply, your insurance |
| After this amount is reached, the provider will pick | | | | premiums are expected to continually rise. In |
| up eighty percent of your medical bills, and require | | | | addition to this, you can't prevent every health |
| you to pay the remaining twenty percent. | | | | problem with exercise and higher co-pays. |
| Because of the rising costs of health care, and | | | | |