Business Health Insurance

Business Health Insurance

Business health insurance is a major cost of doing business, for small companies & mom-and-pop firms. With premiums soaring, lots of small business owners are asking their employees to shoulder more of the financial burden or cutting benefits entirely.

The New York-based Commonwealth Fund, an advocacy group for health care reform, says small business health insurance costs average 18 percent over those of larger businesses. In Texas, health insurance costs increased 10 percent in 2006 alone, according to the Texas Employer Health Benefits Survey.

Those costs have proven high for lots of small businesses. According to the U.S. Chamber of Commerce, over 45 million Americans are uninsured, & approximately 60 percent of the uninsured are employed by small businesses.

In 2006, the average monthly cost for health insurance for small group designs, which are largely used by small businesses, was $311 per month, according to a survey by America's Health Insurance Designs, a trade group representing health insurance companies. The average premium for a relatives of six was $814 per month, the association reported.

Small business health insurance may take a giant chunk out of your revenue, but benefits often attract better employees & help retain existing workers. Satisfied, healthy employees are more likely to help your business grow. If you are struggling to provide health insurance, here are some tips that could reduce your small business health insurance costs.

1. Keep employees healthy. Motorola Inc., for example, has instituted a comprehensive wellness program that includes management for afflictions such as asthma & diabetes, as well as offering flu shots, cancer screenings, smoking-cessation sessions & a round-the-clock phone line staffed by nurses. The company found that for every dollar it invested, it saved $3.93, according to a 2003 document by the U.S. Department of Health & Human Services document, “Prevention Makes Common Cents.” Likewise, heavy machinery manufacturer Caterpillar estimates that its wellness program will save the company $700 million by 2015.

Such wellness programs don’t keep company accountants happy. They’re also popular with workers. Pharmaceutical giant Pfizer Inc. found that 85 percent of its employees in its New York offices participated in at least six wellness program, & that 80 percent used onsite facilities such as fitness centers or physical therapy, according to the HHS document.

2. Reduce coverage. Cutting coverage or asking your employees to contribute more to the plan is a logical step to reducing small business health insurance costs. The downside of this strategy is that it will likely prove unpopular with workers.

It is common for businesses to exclude dental & vision insurance, but talk to your employees to see what they need covered. They might opt for having dental & vision insurance & a health savings account, for example.