There’s a huge chance you’re paying too much for your small business health insurance, and other group benefits you offer your employees. Costs continue to rise for many businesses. Here are some ways you can control costs while continuing to offer the best plans to retain your talent.
1. Activate your employee participation
Look into some consumer-directed health plans. These are health insurance plans using high deductibles with personal health spending accounts to increase consumer accountability for health care spending. They make the consumer (your employees and their enrolled dependents) more responsible for the cost of care, relieving your business of some of that burden. There are many ways employers can work to engage employees, but start with an effective communication strategy that is personalized and easy to understand, so they properly understand what benefits are being offered and how best to utilize them.
2. Design your own plan
Controlling costs doesn’t have to stop at the consumer level. As a business, you can make an even bigger dent in your healthcare costs, especially your premiums, with self-funded health insurance. For example, NARFA offers its members the opportunity to buy health insurance as a self-insured group due to its large buying power.
Self-insured groups are responsible for paying their employees’ medical expenses. But the liability on these plans is not unlimited. Businesses can set limits on individual and total (aggregate) payout, therefore protecting their claims exposure.
They can also control how the plan is designed. Here we come to one of the great benefits of a self-funded plan: you decide which benefits to offer and what your terms of eligibility will be. You analyze your own claims data, determine the best benefit design for your employees, and guarantee the best possible rates.
Please take note that there is a huge difference between retail rates and negotiated rates. Retail rates can be hugely inflated, especially in the current marketplace. In most cases, deep discounts aren’t enough, and it’s possible you will more than likely be paying too much. We have already heard many stories about hardships experienced by small businesses due to the rising costs. Negotiated rates, by contrast, start with the lowest available rates, and work from there.
For example, say a facility charges $5K for an MRI. A carrier may pay only 50 percent ($2,500) through their PPO network contract. That sounds like a great deal, until you find out that the true regional cost of an MRI only comes to $1K, and that with negotiation, you could be paying $1,400 instead of $2,500. By switching to negotiated rates through a self-funded plan, you gain a major opportunity to reduce costs.
We believe in becoming a true partner with our members and clients, so we can do the heavy lifting for you. NARFA exists for the well-being of our members, not to line our pockets! NARFA negotiates rates and designs plans exclusively for you and your business, and believes that both a short and long-term strategy is critical to being responsible with your employee benefits.
Our track record since 1929 is a great one. We have a 99% member retention rate, and offer many programs to help businesses focus on growth and investing for the future. Please contact us to learn more about NARFA programs.