How can you as an employer save money on health care costs

Here are some things that you as an employer can do to cut your total health care costs now.

Number one:
Make sure that you shop around even during the good years. Something to keep in mind is that even if your health insurance premiums only goes up a little bit there might be other carriers out there that will give you an even lower rate if you actually shop around or your current carrier might match the rate you have been quoted. For example, last year one company received a 7% increase in their insurance premiums and they decided to shop around and received rates back that were 10% lower. So what they did was take those bids back to their current carrier and they reduced the increase to 5% and the company decided to stay with its current carrier. In fact according to the Kaiser report 57% of small business shopped for a new plan last year, 31% switched carriers, and 34% changed health plans.

Number two:
Companies also need to start considering health savings accounts, which were actually introduced in 2004 as part of the major Medicare legislation. Health savings accounts are basically like a 401(k) plan for health care costs. What they do is let employees save money for health care expenses using their pretax dollars. These plans can only be used on with a qualified health plan that has a high deductible and the most you can put into the account is the amount of deductible each year. Some companies that have already put this type of plan into effect have actually reported a huge reduction in health care costs. These companies have reported as much as 23% savings per year in health care costs.

Number three:
Even though picking the right health insurance plan is very important so is picking the right broker, so you are going to want to choose a broker who is going to work the best for your company. A good broker is going to be somebody who takes the time to get to know your company and understand what your goals are, including both long term and short term financial goals. But they should also be able to suggest ways that you can cut costs on health care costs and keep you up to date with any changes that have been made in the insurance industry, including new laws that have been passed. It has been shown through a recent survey that 80% of benefits managers turn to their brokers first when creating benefits packages for employees and 70% out of that 80% say that what the broker tells them greatly influences their final decision.

Number four:
Make sure that you take a minute to look at the finer points of your plan and if you can see ways that you might help to reduce costs in the long run don't be afraid to make a phone call to see if you can change how the finer points work to help save yourself some money. For example one company that gets almost all of its medical care from local providers noticed that they were paying for networks with doctors and hospitals that were as far away as three hours, which were rarely if ever used. So the owner of the company called the local hospital and asked if they would be willing to join a more limited provider network that was provided with their insurance plan and the hospital agreed. This small change reduced their premium increase from 11% to 6% in one year alone.

Number five:
Make sure that you know who you are covering for health insurance benefits. One problem that many employers face is that they are providing coverage for employee's spouses who are also being covered by their work. So in answer to this, which causes your health care costs to be higher, most companies are only providing coverage for their employees if the spouse is able to get coverage at their job. But another thing you want to consider doing is to expand your probation period so that you are only insuring employees who are going to stick around long term. In fact employers have found that they can save about 3% each year in health costs by extending the probation period from 3 months to 6 months.

Number six:
If you are a small business, under 50 employees, you should consider joining a purchasing pool.Usually what happens is that a group of small businesses get together to buy health insurance and with their combined purchasing power they end up getting offered better rates and access to plans from a larger number of insurance carriers. But even though these pools are on your side you still need to do some basic research before joining a pool. You want to make sure that more than one insurance company participates and that the program actually negotiates over benefits and rates.