If you had a coupon in your hand, would you still pay full price for an item? Of course not! Because that wouldn’t be smart. So why don’t we apply this same smart spending principle to our small business health benefits?
60% of small businesses that closed down in 2020 will stay closed permanently. For those that were able to stay open, the need to spend smarter is more vital than ever for small businesses. This can start with your small business health benefits.
What are small business health benefits?
Small business health benefits are generally defined as the way a company with less than 250 employees helps those employees with the costs of their healthcare.
What if we told you that you could save 30-50% on your small business’ healthcare without losing quality by simply spending smarter?
Check out these 2 ways to spend smarter on small business health benefits!
1. Tax Credits Discounts
Did you know that every small business has a coupon available for health benefits? Thanks to new legislation, there is a way to take advantage of these healthcare discounts right now!
But before we go into how to unlock these discounts, let’s first define what they are.
What is a health insurance subsidy?
A health insurance subsidy is a government funded discount that lowers your monthly health insurance costs. Health insurance subsidies are available to individuals who are not offered a traditional group healthcare plan by their employer. These individuals can shop for a plan on the Individual Marketplace and then use these subsidies (i.e. discounts) on the plan they purchase. The price discount comes from the IRS, which sends an Advanced Premium Tax Credit directly to the insurance company on the individual’s behalf
Advanced Premium Tax Credits are available to anyone who is not offered a traditional group health plan from their employer. A tax credit serves as a discount (or a “subsidy”) on individual insurance plans.
The IRS sends these tax discounts directly to the insurance company on the individual’s behalf. Individuals can then simply purchase a product on the Marketplace at a lower cost.
How do subsidies work for health insurance?
A subsidy for health insurance is available to individuals who are not offered a traditional group healthcare plan by their employer. These individuals can shop for a plan on the Individual Marketplace and then use these subsidies (i.e. discounts) on the plan they purchase. The price discount comes from the IRS, which sends an Advanced Premium Tax Credit directly to the insurance company on the individual’s behalf.
By staying locked in your traditional group health benefits, you are limiting savings for both your small business and your employees. By spending smarter, you unlock huge discounts for your small business health benefits.
2. Don’t Spend… Save
One aspect of spending smarter on small business health benefits includes taking advantage of Advanced Premium Tax Credits. Another way to spend smarter is by dropping the copay plan, opting for an HSA and saving more regularly!
Too often, health benefits are judged by their copay. But ultimately, this is a pretty backward way of thinking about health insurance. After all, insurance ultimately exists for managing risk.
Check out the image breakdown below comparing a copay plan with a High Deductible Health Plan (HDHP) with HSA contributions from the employer. On the left is the premium cost and risk comparison. On the right is the 3-year impact.
HSA plans have grown in popularity by 700% over the past 15 years and it’s not hard to see why! HSAs not only save costs but also give employees better, safer coverage over time. The second thing to realize is that regularly, copay plans have the same or higher total risk than HSA plans.
This means that you are over-spending up to $7,000 more per year just so an employee can visit the doctor for a low copay of $20. What if I told you that on average, Americans only go to the doctor 2-3 times per year? Let alone that most are just using telehealth now, and the average doctor visit only costs $120 without the copay. Do that math. You quickly see the costs don’t add up to the benefit vs. the risk.
But what you can do is to turn those overspent premium costs into HSA contributions (like in the image above) and actually start making a dent in the net-risk to the employee.
You can see how small businesses could improve their health benefits over time. In just three years, you could fully fund a family’s net-risk in saved HSA dollars!
This is what being smarter looks like for small businesses. Save money and make the health benefit better.
Get Help Getting Smarter!
You have enough on your plate as a small business owner. Thankfully, you’re not alone. There is help out there!
How do you unlock these discounts? By using the Remodel Health solution!
How do you transition from copays to HSAs? By using Remodel Health benefits coaches!
There are smarter ways to do health benefits for small businesses than the outdated, overpriced, underused traditional group health plans. There are better ways to help employees with their healthcare costs.
30-50% savings is happening right now and your next step is easier than ever—email us today! Our consultants can provide you with a risk-free analysis and compare all of your options to finally make an impact for the better.
Important Notice: Remodel Health does not intend to provide specific insurance, legal, or tax advice. Remodel Health always recommends to consult with your own professional representation to properly evaluate the information presented and its appropriate application to your particular situation.