Health insurance benefits are one of the most expensive costs a business takes on. But at the same time, they are one of the most valuable benefits you can offer your employees. Strong business health coverage helps with retention, hiring, and overall employee satisfaction. The challenge for many business owners is finding a way to control costs without stripping away the value that makes these benefits worthwhile. The good news is that there are several strategies that allow you to reduce expenses while still providing meaningful coverage.
Lower Health Benefits Cost Tip 1: Level-Funded Health Plans
Level funding is a hybrid approach that combines elements of traditional insurance with self-insurance. Instead of paying a fixed premium with no return, businesses have the opportunity to keep surplus funds if claims are lower than expected. That surplus can often be applied to future years, helping stabilize long-term costs. This approach gives businesses more control over their health plan while still maintaining predictable monthly payments.
Lower Health Benefits Cost Tip 2: Self-Insured Health Plans
Self-insurance takes that concept a step further. Instead of paying an insurance carrier to take on all the risk, the business assumes responsibility for employee claims. This structure can eliminate certain taxes and fees that come with fully insured plans. In years with lower claims, the savings can be significant. While there is more risk involved, many growing businesses find that self-insurance gives them greater flexibility and long-term cost control.
Lower Health Benefits Cost Tip 3: Health Reimbursement Arrangements (HRA)
Health Reimbursement Arrangements are designed to help offset higher deductibles. Employers set aside funds that employees can use for qualified medical expenses. If those funds are not used, they are not paid out, which keeps costs predictable. HRAs allow businesses to offer lower premium plans while still protecting employees from high out-of-pocket costs.
Lower Health Benefits Cost Tip 4: Gap Insurance for Deductibles
Gap insurance works alongside high-deductible health plans by covering the portion of costs that employees would normally have to pay out of pocket. This allows businesses to reduce premium costs while still offering a level of financial protection to their employees. It creates a balance between affordability for the employer and security for the employee.
Lower Health Benefits Cost Tip 5: Individual Coverage HRA (ICHRA)
ICHRA plans give employers the ability to provide a defined contribution that employees can use to purchase their own individual health insurance. This creates flexibility for both sides. Employers can control their budget, and employees can choose plans that fit their specific needs. It is a structured way to offer benefits without being locked into a single group plan.
Lower Health Benefits Cost Tip 6: Reference-Based Pricing
Self-funded plans can use reference-based pricing to keep costs down. This type of plan doesn’t use standard insurance networks to calculate payment rates. Instead, they are based on a portion of the current Medicare price. This can make healthcare less expensive while also providing more cost clarity. However, companies need to be communicating clearly with employees if using this method, because there is a chance of balance billing if providers charge more than the established rate.
Work With Strickler To Build The Right Plan
There is no one-size-fits-all way to get health insurance for your business. Depending on the size of your firm, the number of employees you have, and your goals, each of these tactics has pros and cons and is best used in certain situations. At Strickler Insurance, we work directly with business owners to set up health benefits that keep expenses down without lowering the value of the benefits for employees. We help you figure out what your options are, analyze different plans, and design coverage that works for both your business and your staff.
If you are looking to reduce your business health insurance costs while still offering strong benefits, turn to Strickler Insurance. Our team is ready to help your business succeed with quality options for group health benefits, dental benefits, and vision benefits, as well as other important commercial coverage like business owners’ insurance, general liability insurance, commercial auto insurance, and more. Contact Strickler today to get started.
