The Cost Of Healthcare

The Cost Of Healthcare
by Takara Alexis

Health care prices for small businesses keep skyrocketing across the board. And as big companies and small businesses continue struggling to maintain low costs, it is commonly small businesses that get hit the hardest. Health care costs are constantly rising, sometimes with double-digit increases each year.

But that does not mean that there are not other possible options. Recently, more light has been shed on added options to assist small businesses with saving money and still have health care available.

Several options are out there that can help small companies minimize expenses. One of very popular option is encouraging employees to get individual health insurance. Instead of the employer subsidizing a large percentage of it, the to price of health care is left to the employee. And on average, individual premiums are less expensive than those of group plans.

And employers are able to help the employee out by giving a reimbursement to cover a portion of the costs, or by helping the employee take care of their Section 125 deduction. Either way, the employer can lower costs a a significant amount by using this method and frequently it can be a less expensive route than the one currently used.

In addition, an increasingly utilized option is to offer Section 105 plans to employees. Section 105 plans grant the employer permission to buy a higher-deductible, (but lower cost), insurance coverage for their employees. The high-deductible is compensated through an employer-controlled, tax-advantage fund that pays claims to the employees for medical costs below the deductible. The result is savings for both employer and employee.

But not every company will benefit from a Section 105. Just like all plans, it's important to talk with a financial professional to figure out what type of health care savings could be achieved in your small business.

Section 105's and advising the purchase of individual insurance are two ways to possibly save your small business money, at a time when small businesses are getting crushed by health care costs. Making the tough choices in every aspects of your business, and viewing all your health care options to minimize expenses as much as possible might just be one of the things that keeps you in the surviving 20% of small businesses.