Five Easy Ways to Lower Health Insurance Costs

April 26, 2010

Every week we talk with business owners concerned about controlling healthcare premiums and are always asked the same question, “How do I lower my costs without hurting my employees?” Here are five simple ways to lower premiums without hurting employees in the process:

Raise the office or hospital copay – Increasing an office visit copay from $30 to $40 can save 7.5% on premium, increasing a hospital copay can save 5%-11%. Most times the actual premiums savings per person is more than the increase in the copay per office visit.
Modify the RX copays – Savings of 10% or more can result when RX copays are increased, particularly for name brand and new drugs.
Add a deductible and cap to RX card – Adding a deductible and a cap on pharmacy- filled prescriptions (not maintenance drugs) to an RX card can save as much as 16%. With one company, adding a $150 deductible gen- erated a $435 premiums savings per person.
Switch carriers – Each year we see some carriers have offer terrific rates and become the ‘hot’ plan, other carriers have large rate increases and price themselves out of the market. We review rates for our clients each year and show them options at renewal.
Implement a Health Savings Account (HSA) – An HSA can provide significant savings for younger, healthier workers by combining a tax-free savings account with a high deductible health plan (HDHP). While not for everyone, younger employees who use very little care may find this type of plan most attractive.
BONUS – Work with a broker – The commissions paid to a broker are built into the premiums for small businesses (under 50 employees) so working without a broker doesn’t save you, in fact, it costs you in time and save you frustration. A broker who talks with health insurance carriers everyday and maintains a good working relationship with them will know which carriers will fit your group best. Look for a broker with advanced health specialist credentials such as Registered Health Underwrite (RHU) or Certified Employee Benefits Specialist (CEBS).

Nobody can deny that health premiums have been creeping up at an alarming rate over the years. These five simple ideas and working with us can help you improve your health benefits and your bottom line.