How to Reduce Insurance Costs During Open Enrollment Season
This article was updated on Sept. 7, 2018.
Open enrollment season for health insurance is typically in the fall but can vary depending on the carrier. Even so, now is a great time to evaluate your plan to make sure it's the best plan available, both for your budget and for your employees.
Compare Your Options
You should not renew your company's health insurance plan without comparing it to your other options first. As the market changes every year, your old plan's fees and benefits could be different. At the same time, there may be new plans available that weren't an option for you last year.
If your business has 50 or fewer full-time equivalent employees, you can compare the plans in your state using the Small Business Health Options Program (SHOP) provided by the U.S. Centers for Medicare & Medicaid Services. This site will tell you whether your state has an exchange or whether you need to use the federal exchange. Another option is to consult an insurance broker, a professional who sells health insurance plans from different companies. As the majority of insurance brokers don't work for any one insurance company, they can give you multiple options.
Consider Sharing Costs With Your Employees
If your business has grown and you can no longer afford to pay for health insurance in full, you may want to consider having your employees pick up some of the cost. While spousal and dependent coverage is important to many employees, one option could be to stop offering coverage for spouses of employees who are eligible for coverage at another job, an arrangement known as a spousal carve out, according to the Society for Human Resource Management.
You could also cover a smaller share of the premiums for your plan and have your employees pay the difference. In addition, you may want to consider switching to a less expensive plan with higher out-of-pocket expenses for your employees.
Consider a Co-Op
Health care cooperatives provide you with an alternative to buying health insurance from a private insurance company. These organizations are set up by groups of businesses, trade groups and nonprofit organizations to sell insurance to their members.
If co-ops are available in your state, you may want to look into their prices, which, in some cases, are the lowest-cost options.
Work to Control Future Expenses
There are initiatives you can take on during the rest of the year to reduce costs, as well. Consider setting up a workplace wellness program to address topics such as fitness, nutrition and smoking cessation. These programs strive to provide your employees with the tools they need to be healthier, which can, in turn, lower their insurance expenses.
You should also teach your employees how to use their benefits cost-effectively. For example, if your plan includes a nurse line, you can recommend that your employees call this line first for minor health problems before going to the emergency room. This action could help your employee avoid a lengthy trip to the hospital, saving you both money down the line. Open enrollment season is a great time to give your employees these types of pointers for the upcoming year.
Even though the end of the year is a busy time for small business owners, you must remember to take advantage of the opportunity to evaluate your health insurance options and make sure the plan you choose makes the most sense for your employees and your budget.