7 Ways to Save Money on Small Business Health Insurance

What are some cost-effective ways to offer health insurance?

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oscar cigna graphic small business health insurance
Our partners at Oscar + Cigna offer tips on how to keep healthcare costs down for employers and employees

There’s one thing we can all agree on when it comes to health insurance: it’s expensive. According to the 2019 Kaiser Family Foundation Employer Health Benefits Survey, small business employers paid an average of 82% of the premium for an individual plan (an average of $5,658) and 70% of the premium for a family plan (an average of $14,035) per employee. And even with generous employer premium contributions, health insurance can cost a lot for employees, too.

As a business owner, it’s easy to feel conflicted about providing employee insurance. You have a budget to manage, and health benefits are a big line item cost. At the same time, you care about your staff’s health and want them to be protected in the event of a medical emergency.

Is it possible to offer health benefits without breaking the bank?

With a little savvy and strategy, you can keep costs down for you and your employees — and make sure everyone stays covered. Here are 7 practical ways to save money on small business health insurance.

You have a budget to manage, and health benefits are a big line item cost. At the same time, you care about your staff’s health and want them to be protected in the event of a medical emergency.

Saving money for your business

If you’re looking for ways to save on health plans but still provide a valuable benefit for employees, here are a few ideas.

Tip 1: Shop around

Health insurance prices change every year. It’s always a smart idea to see what plans are available in your area for the upcoming coverage period. You may be able to save money by:

  • Switching to a different health insurer. Some insurers might increase their rates substantially year-over-year, while others may have a more modest increase (or even decrease their rates).
  • Changing to a new health plan type (like an EPO or HMO, which are usually cheaper than PPOs). EPOs have a curated network of doctors, but don’t require referrals. HMOs are usually built around a single medical system, and require referrals to see specialists. Both types of plans are able to drive cost savings with doctors and medical groups — and pass along those savings to you.
  • Selecting a different set of plan tiers. More options are not always helpful — studies have shown that employees often over-insure themselves when choosing between several plans.

Tip 2: Offer an HSA-compatible plan

A Health Savings Account (HSA) is a long-term account an employee sets up to pay for their healthcare expenses. HSAs can only be used with specific HSA-compatible insurance plans that usually have high annual deductibles and lower monthly premiums. These types of plans can help you save on premium contributions while still providing health coverage for your employees.

Note: Coverage is subject to plan deductibles, co-payments, and coinsurance. See your plan documents for details.

Saving money for your employees

Even if you’re sponsoring health benefits for your employees, they can still end up paying a lot of money for care during the year. According to Kaiser Family Foundation’s 2018 survey, 42% of small business employees had a plan deductible of $2,000 or more — which means they’re on the hook for more out-of-pocket expenses.

Read the rest of the article on Cigna + Oscar’s blog.

Note: This article was originally published on cignaoscar.com. Zenefits has no control over, and assumes no responsibility for, the reliability, quality, or accuracy, of this content.

Cigna + Oscar coverage is insured by Cigna Health and Life Insurance Company.
CA: benefits administered by Oscar Health Administrators. Other states: benefits administered by Mulberry Management Corporation. Pharmacy benefits provided by Express Scripts, Inc. Cigna + Oscar health insurance contains exclusions and limitations. For complete details on product availability and coverage, please refer to your plan documents or contact a representative.

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