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10 Tips to Reduce Your Small Business Healthcare Expense |
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By John Cunningham
For yet another year, Small Business Owners continue to struggle with employee medical plan expenses. Lifestyles, unhealthy habits, prescription drug expenses and medical carrier inefficiencies have all contributed to the 87 percent increase in the cost of medical coverage in recent years. Fortunately, solutions exist to improve employee productivity and increase profitability for small businesses. Following are the top 10 strategies to lower employer-sponsored medical expenses:
Cafeteria Plans: Known under a variety of names – flexible spending accounts, flex plans, dependent care assistance plans, and premium only plans – these save payroll taxes for both the employer and employee. They engage employees in understanding where their medical expense dollars are spent each year. This is the critical step to getting them to take responsibility for their care.
Health Savings or Health Reimbursement Accounts: These are new, and from initial adoption statistics, hold the most promise for reversing increased medical premiums. These accounts involve the patient in the cost of care and encourage them to make prudent decisions about their care. These can maximize choice while protecting against catastrophic medical expenses. With less than 10 percent of the population needing major care in any year, the savings may grow to provide a secure fund for future employee medical expenses.
Wellness Plan: Workforce Wellness Plans have been shown to improve health, reduce sick days and increase morale, productivity and profitability for the companies who have them. Boost your bottom-line and employee health through a Wellness Plan!
Dental and Vision Benefits: Recent research has shown that keeping a healthy mouth will decrease medical expenses as much as 16 percent for pregnant mothers, diabetics and stroke victims. Early detection of cancer during routine dental exams leads to early treatment and improved prognosis. See the whole body, and provide simple dental and vision benefits to reduce future medical costs.
Employee Education: Encouraging employees to make healthy choices throughout the year stabilizes your workforce and keeps them healthy and on the job for years. Simple changes in diet and health habits will bring about higher productivity and morale in your business.
Rewards and Incentives: Getting started towards a healthier workforce requires incentives to change existing behaviors. Not only do they receive a reward from you, they also receive the reward of a longer and healthier life. That’s an employee benefit that money can’t buy!
Employee Assistance Program: Commonly referred to as EAP, this program provides confidential counseling to employees and their families related to life’s issues. This may be psychological, legal or health related. Giving your employees a resource to discuss problems confidentially helps maintain an emotionally balanced and focused workforce.
Risk Assessments: Although risk assessment is part of any basic workers compensation review, the education and behavior changes that result from discussing health and safety in the workplace fall on the employer. Safety improvements prevent accidents to reduce premiums, and demonstrate the employer’s commitment to care for employee well-being.
Multiple Plans: Many health insurance carriers allow small business owners to provide more than one health plan design to their company. Each employee chooses the plan and premium that works for them. Employees get what they want and employers establish a precedent by defining the company contributions towards health premiums.
Disease Management Programs: Programs for those living with diseases range from diet and exercise to counseling and rehabilitation. Supporting the employee in their return to a better health after a catastrophic event is an integral piece of a health care program.
Dr. John Cunningham is a member of the San Rafael Chamber and owner of Marin Benefits and Insurance Services. You may contact him at
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