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SolveYourProblem
Article Series:
Health Insurance
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5 Ways to
Reduce Your Health Insurance Costs
Nearly
one-third of all health-insurance premiums increased to
30 percent or more. At that rate, the average
cost of health insurance per employee will exceed $3,000. Seventy-three
percent of senior executives believe health-care costs will
continue to increase 20 percent or more each year for the next
three years. The message here is clear: If you haven't already
gotten serious about cutting your company's health-insurance
costs, now is the time. It can be done. The first thing you
should do is learn how the system works--or doesn't work. Most
small employers spend fewer than four hours a year thinking
about their company health plans. Learn what your options are.
Your insurance agent can help you shop for cheaper plans. But
don't stop there. Compare plan benefits, insurance-company
records, and service guarantees.
Consider Blue Cross and Blue Shield plans and HMOs (health-maintenance
organizations), even if your agent doesn't handle them. The
Blues in some areas, offer clear advantages to small companies.
Experts regard HMOs as the best buys in health care. Find out
if your company is eligible for new, low-cost health insurance
plans now available in five states. In addition, foundation-funded
pilot projects in several parts of the country are demonstrating
that it is possible to cut health-coverage costs 30 to 40 percent.
In short, health insurance isn't as simple as it used to be.
And the pace of change is accelerating, offering new hope for
a truce in the business battle with exploding health-care costs.
The next couple of years present as much potential for change
as at any time in the past 20 years. You can be part of that
change by putting at least some of the following 5 ideas to
work for your company.
1.
Increase Cost Sharing By Employees
This recommendation is at the top of every consultant's list.
Small companies tend to pay far more of their workers' total
health-care bill than large companies do. Yet research shows
that insulating employees from the costs of care encourages
unnecessary use of health services. Fifty-two percent of the
companies responding to the Nation's Business health survey
said they pay 100 percent of their employees' health-insurance
premiums. But 45 percent said they intended to implement or
increase employee contributions to these premiums. An equal
number said they plan to increase employee deductibles. Insurance
companies first attached $100 deductibles to major-medical
plans in the early 1950s. But 40 percent of employers still
set deductibles at $100 or less. Raising a $100 deductible
to $250 would cut premium costs for single coverage by about
11 percent. A $500 deductible would cut costs by about one-fourth.
A $1,000 deductible would save about one-third.
2.
Allow Employees To Pay For Health Premiums With Tax-Free
Dollars
Set up a so-called flexible spending account, which allows
your employees to pay their share of health-insurance premiums
and un-reimbursed health-care expenses with pretax dollars.
A flexible spending account could save employees 20 cents to
35 cents on the dollar, because state and federal income taxes
and Social Security taxes are not imposed.
Moreover, the company saves by reducing the employee's base
salary on which it pays Social Security and other taxes. Hire
an outside payroll accounting firm to handle the paperwork.
You can pay the service fee and still come out with a net savings.
The monthly administration fee would run between $2 and $5
per employee.
3.
Transfer High-Risk Employees To The State's High-Risk Pool
Insurance premiums soar whenever someone in a small-group
plan becomes very ill--with cancer or heart disease, for example.
As an employer, you should explore the possibility of moving
employees with serious health problems into a state high-risk
pool and then negotiating a lower premium for the healthy members
of your group.
4.
Switches To An Open-Enrollment Blue Cross And Blue Shield
Plan
Blue Cross and Blue Shield plans operate as
de facto high-risk pools in a number of states by providing "open enrollment" periods
during which any group can buy insurance. Among the 74 Blue
Cross and Blue Shield organizations nationwide, 21 offer open
enrollment. All the Blues once used community rating to set
premium levels. But that began to change in the 1960s when
commercial insurers started to lure away firms with low risks
by offering them cheaper health insurance.
5.
Replace Your Traditional Health Plan With An HMO Unlike traditional health insurance, HMOs cover all medical
needs, including routine preventive care, for a flat monthly
fee that typically is less expensive than traditional health
insurance. Moreover, two types of HMOs, the staff and the group
models, have proven to be more effective at controlling costs
than any other form of health-care delivery. Staff models employ
physicians directly and put them on salary. Click here to to view health insurance quotes, compare plans side-by-side and apply for the most affordable health insurance within your budget. I did this myself (June 17, 2011) to change my health insurance policy. Saved me $84 per month (or $1,008 per year). It's my SolveYourProblem recommendation.
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by SolveYourProblem.com
: 2006
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