Why group health insurance is expensive for small businesses?
The cost of small business health insurance depends on a number of factors, including:
- The overall size of the company. More society, in general, the more health insurance costs will be due to the fact that the risk is spread over a small number of people. Large companies have better rates because there are more people insured, spread risk.
- general health of society. As many people make claims, health insurance rates will rise.
- The average age of the company. Young adults are more affordable to ensure that older adults because they use health care services less often.
There are different options for entrepreneurs who want to offer their employees access to health insurance.
Here are some alternatives:
- Find individual plans. Compare group health rates with a health insurance individual coverage in the private market. GoHealth Workplace is a program employers can use to make it easy for people to find health insurance.
- offer to subsidize individual coverage. For employees who buy individual plans, offer to pay part of the monthly premium.
- Using high-deductible plans. high deductible plans have low monthly premiums but let employees pick up more of the cost. While this may not be the best option for all employees, it will help business owners save money. These plans can also be combined with a health savings account (HSA) to accumulate funds for health care and business owners can provide funds to these accounts for employees.
- Avoid mini-med plans. This type of policy provides employees with limited coverage that could leave them with plenty of off-pocket costs and plans will be completely eliminated by 2014. The government allows some employers to continue offering these plans now.
- Select health insurance plans with limited networks. Health insurers can negotiate rates with some health care providers in an area to cut costs. A plan with a limited network will help reduce the cost of monthly premiums, but could be a problem if the contractor or employees travel frequently. This could also be a problem for employees who commute to work away.
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