Saving on your small business health insurance can be a
challenge. But there are ways to overcome the financial obstacles and
get the coverage necessary for your business. There are two major
benefits of employer-based coverage. First these plans, although
expensive, usually carry the best all around protection for you and your
employees. Second, providing benefits plays a key role in attracting
and retaining quality employees.

Why is coverage for small businesses so much more than for large corporations?

Health
insurance for small businesses cost so much because of the high quality
coverage concentrated among a small group of people. Every individual
within the group represents a different level of financial risk to an
insurance company, and this risk is added up and spread out among the
group. Large corporations pay considerably less because the risk is
spread to such a large group, where small business owners can see
unreasonably high increases in premiums due to one or two members. Small
businesses also have to insure their employees under state mandates,
which can require the policies to cover some specific health conditions
and treatments. Large corporations’ policies are under federal law,
usually self-insured, and with fewer mandated benefits. The Erisa Act of
1974 officially exempted self-funded insurance policies from state
mandates, lessening the financial burdens of larger firms.

Isn’t the Health Care Reform Bill going to fix this?

This
remains to be seen. There will be benefits for small business owners in
the form of insurance exchanges, pools, tax credits, subsidies etc. But
you can’t rely on a bill that is still in the works, and you can’t wait
for a bill where the policies set forth won’t take effect until about
2013. Additionally, the bill will help you with costs, but still won’t
prevent those costs from continually rising. You, as a business owner,
will need to be fully aware of what you can do to maintain your bottom
line.

What can I do?

First you need to understand the plan options out there. So here they are.

PPO

A
preferred provider option (PPO) is a plan where your insurance provider
uses a network of doctors and specialists. Whoever provides your care
will file the claim with your insurance provider, and you pay the
co-pay.

Who am I allowed to visit?

Your provider will cover
any visit to a doctor or specialist within their network. Any care you
seek outside the network will not be covered. Unlike an HMO, you don’t
have to get your chosen doctor registered or approved by your PPO
provider. To find out which doctors are in your network, simply ask your
doctor’s office or visit your insurance company’s website.

Where Can I Get it?

Most
providers offer it as an option in your plan. Your employees will have
the option to get it when they sign their employment paperwork. They
generally decide on their elections during the open enrollment period,
because altering the plan after this time period won’t be easy.

And Finally, What Does It Cover?

Any
basic office visit, within the network that is, will be covered under
the PPO insurance. There will be the standard co-pay, and dependent upon
your particular plan, other types of care may be covered. The
reimbursement for emergency room visits generally range from sixty to
seventy percent of the total costs. And if it is necessary for you to be
hospitalized, there could be a change in the reimbursement. Visits to
specialists will be covered, but you will need a referral from your
doctor, and the specialist must be within the network.

A PPO is an
expensive, yet flexible option for your small business health
insurance. It provides great coverage though, and you should inquire
with your provider to find out how you can reduce the costs.

HMO (Health Maintenance Organization)

Health
Maintenance Organizations (HMOs) are the most popular small business
health insurance plans. Under an HMO plan you will have to register your
primary care physician, as well as any referred specialists and
physicians. Plan participants are free to choose specialists and medical
groups as long as they are covered under the plan. And because HMOs are
geographically driven, the options may be limited outside of a specific
area.

Health maintenance organizations help to contain employer’s
costs by using a wide variety of prevention methods like wellness
programs, nurse hotlines, physicals, and baby-care to name a few.
Placing a heavy emphasis on prevention cuts costs by stopping
unnecessary visits and medical procedures.

When someone does fall
ill, however, the insurance provider manages care by working with health
care providers to figure out what procedures are necessary. Usually a
patient will be required to have pre-certification for surgical
procedures that aren’t considered essential, or that may be harmful.

HMOs
are less expensive than PPOs, and this preventative approach to health
care theoretically does keep costs down. The downside, however, is that
employees may not pursue help when it is needed for fear of denial. That
aside, it is a popular and affordable plan for your small business
health insurance.

POS (Point of Service)

A
Point of Service plan is a managed care insurance similar to both an HMO
and a PPO. POS plans require members to pick a primary health care
provider. In order to get reimbursed for out-of-network visits, you will
need to have a referral from the primary provider. If you don’t,
however, your reimbursement for the visit could be substantially less.
Out-of-network visits will also require you to handle the paperwork,
meaning submit the claim to the insurance provider.

POSs provide
more freedom and flexibility than HMOs. But this increased freedom
results in higher premiums. Also, this type of plan can put a strain on
employee finances when non-network visits start to pile up. Assess your
needs and weigh all your options before making a decision.

EPO

An
Exclusive Provider Organization Plan is another network-based managed
care plan. Members of this plan must choose from a health care provider
within the network, but exceptions can be made due to medical
emergencies. Like HMOs, EPOs focus on preventative care and healthy
living. And price wise, they fall between HMOs and PPOs.

The
differences between an EPO and the other two organization plans are
small, but important. While certain HMO and PPO plans offer
reimbursement for out-of-network usage, an EPO does not allow its
members to file a claim for doctor visits out its network. EPO plans are
more restrictive in this respect, but are also able to negotiate lower
fees by guaranteeing health care providers that it’s members will use
in-network doctors. These plans are also negotiated on a
fee-for-services basis, whereas HMOs are on a per-person basis.

HSA (Health Savings Account)

An
HSA is a tax-advantaged account used to pay existing and future medical
expenses. HSAs are used in conjunction with high-deductible health
plans (HDHP), which will make some with pre-existing conditions
ineligible. Also, HSAs must be funded with cash. Communicating the terms
of this account to your employees is important, as a large number of
HSAs are underfunded or improperly funded. The health savings accounts
were signed into the law by George Bush in 2003, and have become an
affordable alternative to a group health plan.

When inquiring
about an HSA, there will be a few things you will want to clarify. While
HSAs generally cover routine medical expenses and copays, some can
provide dental and vision care as well. And since HSAs can be combined
with certain compatible plans, it is important to understand how money
from the account will be allocated. And finally, you will want to know
about cashing out your HSA balance. The amount is taxable and could be
subject to a ten percent excise tax.

HRA (Health Reimbursement Arrangement)

An
HRA is exactly what it sounds like. The employer reimburses the
employee for health care. As an employer, you will usually have the
option to contribute to a reimbursement fund, or to pay fees as they are
incurred. These reimbursements can be deducted from your taxes, and are
tax-free for your employees, saving you both money.

Some
providers empower employers by giving them more options. HRAs, unlike
HSAs, don’t have to be funded with cash money, placing a book keeping
entry on your balance sheet is enough. You can usually control aspects
of your arrangement such as reimbursement limits, whether you or your
employee pays first, and if the previous year’s funds roll over.

HRAs
are becoming a more popular option because of the control it has given
small businesses. Combined with a high deductible health plan (HDHP), an
HRA could be the most cost-effective solution to your small business
health insurance problems. It’s always best to compare these plans to
PPOs, HMOs, and EPOs to know what works best.

Fee for Service (FFS) or Traditional Indemnity

A
fee for service plan is the most flexible small business health
insurance option. You choose your doctor, and your hospital. You can see
a specialist without a referral. This flexibility, however, comes with
more out-of-pocket expenses and higher insurance premiums.

The
typical FFS plan has a deductible ranging anywhere from five to fifteen
hundred dollars. After this amount is reached, the provider will pick up
eighty percent of your medical bills, and require you to pay the
remaining twenty percent. Because of the rising costs of health care,
and the potential for a small number of doctor’s visits to cost
thousands, these plans can become incredibly expensive.

Flexible Spending Account (FSA)

A
flexible spending account is a savings account to be used for medical
expenses, and is funded by pre-tax dollars. Using pre-tax dollars means
that your employees will actually show that they have less income, and
will therefore have less taxes withheld. As an employer, you set the
limit on contributions to the account per year. In addition to the
employee contribution, you can also credit the account, or fund it
completely from your general assets.

An FSA, especially if combined with an HDHP, can significantly reduce the costs of small business health insurance.

You
should be forewarned, money from FSA accounts cannot be rolled over.
They are, however, available to use for two years and two and half
months after the benefit year. A terminated employee won’t be able to
use leftover funds, unless there is a positive remaining balance and
COBRA is elected.

Small business health insurance providers have
made significant improvements in their services to simplify the
administration of your plan. With HRAs, FSAs, and HSAs, your employees
can use debit cards for medical transactions. Be sure to research this
thoroughly. You will want to be sure your debit card plan is IRS
compliant, and that you can use a large number of pharmacies. You should
also pick a plan that can verify eligibility on the spot. Talk with
your agent about linking transit, parking fees, and prescriptions to the
same card. When picking the debit card options, please be sure to
clarify the details of the substantion process. This is IMPORTANT! With
other plans, the provider may assign someone to manage your plan. Or you
may have to hire someone. Still, you should be able to login to your
account and print insurance cards, important papers etc.

The next
thing you can do is thoroughly assess your needs. Being that every
member of your small business plays a key role in its success, it is
vital that their needs are met. And understanding these needs is crucial
to finding the right plan. Find out about chronic illnesses, and
additional information related to past health issues. Know what your
employees think about health insurance, and get them involved in the
process.

Hiring an agent or a broker

Finding
and understanding small business health insurance can be a daunting
task. While some choose to go it alone, others need some professional
assistance. You need to understand the difference between an agent and a
broker, and how you can get the most from either of them.

A broker

Brokers
function independently and usually work for several different
companies. Since they have a variety of resources, they can usually
provide more options and a better overall view of the marketplace.
Brokers will assist you by evaluating the costs and designs of plans
from your local major carriers. The cost isn’t everything, you want to
get the coverage that you need.

Ask the broker how he or she is
getting paid for their services. They should readily divulge that
information. Some brokers may charge you a flat free. Some receive a fee
from an employer, while others receive a commission from the insurance
provider. Any commissions could be reflected in your premiums, but not
to the point that you should worry.

An agent

Agents
typically provide services for one company. They have a closer
relationship to the insurance company than a broker would, giving them
more leverage to make alterations to your plan. In some cases they can
offer a particular plan for less than a broker, and may have access to
additional services like worker’s compensation. To find out what
different providers have to offer, talk to more than one agent. It may
be time-consuming, but it could bring you closer to the most
cost-effective solution for your small business health insurance.

One
of the common options presented by agents is the employee-elect option.
This is an arrangement where employees pick the plan they prefer. Those
who don’t need as much coverage won’t be forced to pay so much, and
those who do need it can get it without increasing the financial burden
of the company as a whole.

How to Save On Your Small Business Health Insurance Plan

What’s
important to remember is that there really is no inexpensive solution
to health care. Even if your initial premiums are reasonably low, they
could rise significantly at your next renewal. So saving money on small
business health insurance is about doing a combination of things
simultaneously to get good rates, and to then maintain those rates.. And
it will require a consistent effort from you, your employees, and your
insurance provider.

First, you can save yourself money by reading the fine print.
You need to know exactly what your plan does and DOESN’T cover. There
are also state mandated coverages. For example, in states like Illinois,
your insurance must cover mammograms. Also, understanding the ins and
outs of your plan will give you and your employees a better idea of how
to deal with your insurance.

Next, you should shave unnecessary benefits.
After reading all about your plan, you will find coverage for things
you may not need. Eliminating these benefits can significantly drop
monthly small business health insurance premiums. For example,
eliminating coverage for brand name medications can reduce costs by more
than 25 percent.

Wellness program have worked wonders for small businesses.
A wellness program is any program designed to promote healthy living
within the organization. Weight loss competitions benefit every
participant. Add a financial incentive for further motivation. Stock the
work fridge with water, and leave literature about healthy living lying
around. Search the internet for calorie counting charts. Raising
awareness entice workers to make positive changes. Active, exercising,
diet-conscious employees have stronger immune systems, more vitality,
and more productive workplaces. They also don’t deal with as many health
issues. Fewer doctor visits and hospitilizations will help maintain
lower annual premiums, because it will prove to your insurance provider
that your business is a low financial risk.

Increasing your co-pay and deductible can go a long way towards cutting costs.
For instance, raising co-pays by just ten dollars has saved companies
as much as thirteen percent on their premiums. A higher deductible will
significantly reduce your monthly premium. To lessen the financial
burden of high-deductible health plans (HDHPs), combine them with an
HSA. Combinations like these have saved both business owners and
employees bundles of cash.

Check into getting a nurse hotline.
A nurse hotline is a toll free, 24-hour-a-day, seven-day-a-week
service. Employees can get medical advice from qualified, registered
nurses. This method has deterred a large number of people from emergency
visits, and it can also be used for preventative care as well. Insurers
like Nationwide have them, or you may have to purchase from a
third-party provider.

Increase the size of your group to reduce your monthly small business health insurance premiums.
In a survey by America’s Health Insurance Plans, small businesses who
employed ten people or less paid forty three more dollars on average
than businesses with twenty six to fifty employees. Check around with
other businesses owners, or fellow members of business organizations.
Some states also have small business groups and pools for this purpose.
Check with your state Chamber of Commerce and Department of Insurance.

Beware of heavily discounted plans.
First, there are numerous scammers trying to get your money. They
promise low rates, and usually cover little to nothing at all. The
internet is notorious for swindlers trying to hustle you out of a buck.
If you are going with a company you aren’t familiar with, please do your
research. On another note, even reputable companies present problems.
In an attempt to gain market share, Blue Cross offered small businesses
discounted rates in 2008. For 2009, some of these same businesses were
set to see increases of as much as 47% in their premiums. As the costs
of medical care increases, the costs are shifted from the insurer to the
insured, and discount plans become overpriced plans quickly.

Shop around.
As mentioned before, talking to different agents will expose you to the
best that insurance providers have to offer. Ask other small business
owners about their providers. You can use trusted online resources like
Netquote and Ehealthinsurance to shop around instantly. These services
also let you compare plans side by side, and allow you to purchase your
plan online. Even after you get your initial plan, it’s good to annually
reevaluate your coverage. This will keep you on the up-and-up about
what the market is offering. Keeping costs down is an ongoing effort,
especially with rates and plans changing all the time from company to
company.

Share some of the costs with your employees.
Raising employee contributions isn’t a popular option, but it may be
one of the only ways to absorb costs and maintain small business health
insurance coverage. Communicate with your employees about how to keep
costs down, and remind them that their increase is your increase as
well.

The sad truth is that, no matter how many cost-cutting
methods you apply, your insurance premiums are expected to continually
rise. In addition to this, you can’t prevent every health problem with
exercise and higher co-pays.

The Health Care Reform Bill won’t
kick in until about 2013, so waiting on its benefits won’t do you any
good. There is definitely a need for change, because the current system
discourages competition and growth. With smaller businesses functioning
as the backbone of this ailing economy, company medical insurance must BE affordable, and STAY affordable.

The post Small Business Health Insurance – An Employer’s Guide to Getting Small Business Health Insurance appeared first on New Health and Fitness.

Do Not Read This Unless You are Making a lot of Money!:

If
you would like to know how you can save up to 47% on your current Health
Insurance Coverage read on… this is going to be one of the most
informative messages you will ever read. After reading this message you
will never going to have words; expensive and health insurance in the
same sentence.

As you already know health insurance costs are at
highest they have ever been and there is no sign of them slowing down.
More and more Americans are forced to cancel their coverage simply just
because they cannot afford it.

Who are the uninsured?

o Approximately 46 million Americans,
or 15.7 percent of the population, were without health insurance in 2004
(the latest government data available).

o The number of uninsured rose 800,000 between 2003 and 2004 and has increased by 6 million since 2000.

o
The increase in the number of uninsured in 2004 was focused among
working age adults. The percentage of working adults (18 to 64) who had
no health coverage climbed from 18.6 percent in 2003 to 19.0 percent in
2004. An increase of over 750,000 in 2004.

o Nearly 82 million
people – about one-third of the population below the age of 65 spent a
portion of either 2002 or 2003 without health coverage.

o The number of uninsured children in 2004 was 8.3 million – or 11.2 percent of all children in the U.S. (1).

You might say that I have great coverage that I am happy with… that’s totally fine.

For
past sever years average rate increase for health insurance was 16.2%
and what if it keeps on going? If you are right now paying $500 per
month for your health insurance in three years from now you would expect
to pay over $780 for the same plan. Wait… we all know that insurance
companies consistently decrease their benefits and increase co-pays and
deductible. Therefore you will pay more for less coverage. By the way
if you keep same plan for over five years you will pay over $1000 a
month just for your medical coverage. What if you use your Health
Insurance?… Chances are if it is not for a regular doctor visits or a
check ups it would be considered pre-existing condition. That means your
chances of changing to a more affordable coverage in the future will be
nearly impossible. That is one of the main reasons people cancel their
health insurance because they were diagnosed with something or taking a
prescription medication and the insurance company kept raising their
rate until they could not qualify for any other coverage and could not
afford the one they had.

Now you are saying I do not need coverage my spouse works for a company and I have group coverage… Great.

What
would happen if your spouse left that job or the company stopped
providing benefits? Probably the most obvious things that you can see
how much that group coverage is really costing you. Next time check how
much is deducted out of the paycheck for health coverage, especially for
dependents. Group plans do cost more money because by law they are what
are called “guaranteed issue”. That means you can have serious medical
conditions and still get coverage. Insurance companies have to follow
the law and they know they have to accept everyone who works for a large
company, therefore they do charge more money for coverage. The biggest
problem is not the cost of group health insurance it is what happens if
some one, while on the group plan, is diagnosed with a condition or
starts to take prescriptions medications. We get back to same issues as
mentioned before, unable to qualify for health insurance in the future.
There are people that want to leave their job but they cannot because
they are going through treatment and cannot to pay for it on their own.

There
is another solution… Some might save, so what is the point of even
having health insurance. Once you diagnosed with something and insurance
company is going to keep raising rates to the point where I am going to
have to cancel it anyway. Especially if something does happen and I
have to use my coverage I might not be working and I might not have
income. Is my insurance company is still going to keep raising my rates?
YES.

Before you think about canceling your coverage consider this. Here are some statistics

o
A recent study by Harvard University researchers found that the average
out-of-pocket medical debt for those who filed for bankruptcy was
$12,000. In addition, the study found that 50 percent of all bankruptcy
filings were partly the result of medical expenses. Every 30 seconds in
the United States someone files for bankruptcy in the aftermath of a
serious health problem.

o Illness and medical bills caused half of the
1,458,000 personal bankruptcies in 2001, according to a study published
by the journal Health Affairs.

o Average day in the hospital is $7500 per day.

How
can you save up to 47% on your health insurance? Simple… You probably
already heard of Health Saving Accounts. They are becoming more and
more popular everyday. With the way health insurance prices are moving
today Health Saving Accounts are the only way to keep your coverage,
save hundreds per month on your health insurance and still have a peace
of mind.

To this day I was not able to hear a good definition that
everyone can understand. I will do everything I can to make it simple
to understand. The easiest way to understand Health Saving Accounts is
to think of them as Roth IRA or your Company’s 401k plan. Instead of
giving your money away to insurance company you get to keep it more of
it for yourself. The way HSA plans work is there health insurance
combined with savings account which works in a similar way to your
retirement account. There tremendous benefits to have HSA qualified
health plan. First all the money that you put in to your HSA account is
100% tax deductible and it is your money that rolls over year after
year. At the age of 65 and up if you have not used up all of your HSA
money you can roll it over in to your retirement account. Second your
health insurance costs are going to be cut almost in half. For example
if you had Health Insurance plan with $2500 deductible now and it is
costing you $300 per month the same plans with HSA qualified plan, now
will cost you only about $160 per month. The reason you save so much
money with HSA qualified health plan is because HSA qualified plans do
not cover anything until the deductible is met. There are exceptions
depending on the Health Insurance Company. Some insurance companies
will pay for your once a year physical before you meet your deductible.

Let
take an example of how HSA qualified plan could benefit you. Let take
some actual numbers from actual health insurance company. In this
example I am going to use HSA plans from company called Assurant Health.
Assurant Health is leader in Health Saving Accounts and they one of the
first companies to implement them. The main reason is that Assurant
Health is part of the world’s largest financial company that sets up
retirement accounts. In this example I am going to use a family of four,
husband 46, wife 42, kids are 12 and 16. On a regular family plan with
$2500 deductible, maximum out of pocket of $5500, co-insurance of 80%
and doctor visits covered with $35 co-pay, they are going to pay
$676.40. Something to keep in mind that all of the regular PPO plans
that are available on the market today have family deductible which is
double of individual deductible. That means that if you have a plan with
$2500 deductible and $5500 maximum out of pocket that means that your
family deductible is $5000 and your family maximum out of pocket is
$11,000. When we are comparing HSA qualified health plans there is only
one deductible, once you meet it you are covered at 100% on the most
plans. There are some companies and plans that you still might be
responsible for the percent age of the bill until you reach your maximum
out of pocket. Most HSA plans do not have maximum out of pocket that
meant once you met your deductible you are covered at 100%, it’s that
simple. The same plan with $5700 deductible for the entire family with
HSA qualified health plans will only be $491.64 per month. For the total
monthly savings of 184.76 per month. Also your maximum out of pocket
will decrease from $11,000 on a regular plan to $5700 with HSA health
plan. That’s yearly savings of $2,217.12 and additional savings of $5300
on the maximum out of pocket. (that’s if you have had to use the plan
for emergencies) The main reason for starting HSA health insurance is
for Saving Account and being able to put money in to account, at your
discretion, tax free. You can put money in to HSA qualified account up
to your deductible and you do not have to put any money in to that
account if you do not want to. Health Saving Accounts are as flexible as
you would want them to be. TO get more information on HSA accounts and
get quotes for HSA qualified health coverage see my bio.

The post How You Can Save Up To 47 Percent On Your Health Insurance Right Now appeared first on New Health and Fitness.