4 Reasons Why Health Insurance Costs Are Going Up and How Small Business Can Combat Pricing Increases

Six months from today, ObamaCare goes into effect. For many businesses, this will mean an increase in insurance costs. From health care agency Newtek, here are 4 ways businesses can limit these increases.

Reason #1:  Carriers are no longer able to charge sicker patients more money for health insurance, and charge younger and healthier employees less money for their premiums, due to the removal of pre-existing condition exclusions.

Solution: Business owners need to focus on how their companies and their employees use the health care system, and weigh out the importance of carriers, networks, and price.

Reason #2: The United States faces issues with obesity, diabetes, and heart disease, all of which are leading to increasing health care costs.

Solution: Healthy companies that have lower health risks will be able to maintain lower rates than other companies that have large health related claims. Wellness programs, smoking cessation plans, and incentive programs do help lower and maintain the health insurance costs not only for the company, but directly for the individual employees on the plan.

Reason #3: The administrative costs of shopping for health care plans can be overwhelming to businesses. The time and money it takes for them to shop the plans, understand them, and implement them in a changing market is overwhelming, time consuming, and costly.

Solution: Businesses need to integrate their Payroll, Benefits and P&C to make sure all plans are in compliance, coverage is affordable, they understand the impacts of their P&C policy by changing health coverage, and utilize dedicated servicing representatives for HR addition and attrition across all policies. This can save time and money by making one phone call to review a new hire, as opposed to 3 - 4 that it may otherwise take.

Reason #4: Business owners are fixated on a traditional health plan, and not looking at alternatives.

Solution: Business owners can implement health savings account plans and other comparable alternatives.  Understanding the options, and as the healthcare market starts to change, company plans should be effective and efficient in the years to come.