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Small Business Insurance Shopping Tips

How to Save Money On
Small Business Health Insurance

Small Business Health Insurance can be one of your biggest employee expenses, but it can also be one of your greatest benefits.  Offering healthcare benefits shows that you care about the welfare of both them and their families, which in turn generates high quality, loyal employees.  Like any other business expense, it pays to shop and compare before choosing your vendor.  Here are a few ways to lower the cost of insurance and choose a great plan for your small business.

Higher Deductibles and Co-Pays
The level of co-pays, deductibles, and maximum out of pocket costs directly affect the price of health insurance policies.  Some small businesses are now saving money on premiums by opting for higher co-pays and deductibles, then offering to reimburse each employee up to a fixed amount for medical expenses.  Healthy employees usually will not spend their entire fund amount, while those employees with claims will spend the same amount out-of-pocket as they would if the co-pays and deductibles were lower.  Either way the company comes out ahead through lower premium costs, not to mention having grateful, loyal employees.  Check with your accountant for the rules in your state before implementing this strategy.

Include Employees In the Process
Select employee representatives to participate on the selection committee, then be open with workers about the total cost of health insurance to help them appreciate the importance of this benefit.

Determine the Needs of Your Employees
Survey your employees to see whether they need health insurance coverage for their families.  If both parents work, it is possible that family members are already covered on another policy.  So, while you will be required to offer insurance to all employees, you can pursue quotes based on knowledge of actual need.

Shop With a Plan
Have a type of coverage in mind when you begin shopping so that you’ll have a starting point and not be overwhelmed by the options up front.  Use this as a base of reference as you consider additional types of coverage and options offered during the insurance quote option.

Limit the Extras
Popular additions such as dental or vision coverage, life insurance, or disability insurance can seriously impact the cost of your insurance policy.  Treatment coverage for eating disorders, drug or alcohol rehabilitation will drive costs higher, yet may be rarely used.  Focus on providing coverage for the most common problems before adding lesser-used extras. 

Cost Containment Provisions
Some policies require second opinions, encourage generic drugs over name-brand prescriptions, and include other cost containment features.  These conditions help to reduce the potential risk to the insurance company, who in turn rewards you with lower insurance premiums.

Evaluate the Quality of the Insurance Company
Before you select an insurance company, check their record with the State Department of Insurance for their stability and history of complaints.  Review the claims and appeals processes, including turnaround time.  Does their network of healthcare providers mesh meet your employees’ needs?  What were the results of the insurance company’s latest member satisfaction survey?  Consider the insurance company’s rate increase history.  Don’t settle for a summary of benefits; examine all of the policy details thoroughly before making a final decision.  Select a company with a flexible plan so employees may select the level of insurance they need.

Help Your Employees Remain Healthy
If your employees file a low number of claims during the year, you will be in a better position when it’s time to negotiate renewal rates.  You’ll also save by reducing the number of employee sick days.  Here are a few easy ways to encourage your employees to take care of their health:

  • Support wise food choices.  Fill vending machines with granola bars and dried fruit instead of chocolate or cookies.
  • Select healthy menus for company events.
  • Offer memberships to a fitness center as an employee benefit.
  • Provide lunchtime seminars on health and safety.  Serve a free lunch to encourage attendance.
  • Establish a zero-tolerance drug and alcohol abuse policy.  Limit alcohol served at company functions.

Make Your Move
Now that you know some of the best practices when shopping for small business insurance, it’s time to start the process.  Simply enter your zip code into the box below, and you’ll instantly see insurance companies offering policies in your area.

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