Many small business owners make it a practice to consistently look for ways to save money, operate their businesses more cost-effectively, and simultaneously improve the quality of their products or services as well as their companies.
And one of the ways they can often do this is by making changes in the small group health plan coverage.
Because the small group coverage market is a competitive one and benefits, features, and offerings change continuously, it can pay to consider changing your small group coverage periodically.
WHEN IT PAYS TO CONSIDER HEALTH COVERAGE CHANGES
With open enrollment just around the corner, employers may wonder if they must wait until then to make any changes with their current health coverage options.
While you’re able to make changes to your health plan at any point during the year as an employer, there are compelling reasons to wait. Typically, employer health insurance changes are done at the start of a plan year, which gives your employees time to consider their options during the open enrollment period.
Also, as the Society for Human Resources Management (SHRM) notes,
“If employers are going to change benefits programs to help employees enhance their physical, mental and fiscal health, they should determine if new offerings will meet actual workforce needs.”
In addition, SHRM suggests that, as an organization’s workforce changes, employers should be prepared to add, modify, or – in some situations – even end benefit programs, recognizing that benefits valued in the past may not be effective in the future.
Health Coverage Concerns: Rising Costs and Increased Expense
One reason to consider changes is that costs can increase from year to year. Smaller employers struggling to control these rising health insurance costs often consider making changes to their current employee benefit plan.
And, as we’ve noted, this is usually a consideration that takes place at the beginning of a plan year, and then shared with their employees during the open enrollment period preceding the start of the plan year
Also, as one company points out,
“Occasionally, when an insurer and a doctor/hospital are unable to reach an agreement on a contract, the network contract ends. This means that your employees may have to find new doctors or pay out-of-network rates to continue seeing their doctor or using familiar facilities. Employers may want to consider switching plans if their employees’ services and treatments will be disrupted by a contract dispute or cancellation.”
Some other options for modifying an existing plan when an employer is looking to control rising costs can include:
- Increasing their employee’s cost-sharing (i.e., deductibles, copays, and annual out-of-pocket maximums).
- Creating a new health plan design placing greater financial responsibility on employees such as a high deductible health plan or HDHP.
- Implementing an employee wellness program that motivates employees to take steps toward improving their health and well-being.
WHEN YOU MAY CONSIDER CHANGING YOUR SMALL GROUP COVERAGE
While we’ve mentioned a few reasons for making changes in your company’s current health coverage plans, there are four main issues that can arise for any small but growing enterprise.
These can be viewed as signs that your small business should consider switching health insurance.
Your health plan premiums have become too costly for your business
It’s not uncommon for a small business to be saddled with a high-premium, low-deductible plan. But if their current insurer has no available options to make their plan more affordable, the only viable option is to seek out a new provider.
Your employees are not happy with their coverage
Offering only health plans based on just the bottom line rather than for overall value rather can eventually lead to losing some of your most valuable, longtime employees. For example, many of your younger and generally healthier employees may prefer lower premiums and a leaner plan, while older workers may value more coverage.
Your business is growing
With business growth comes many changes, which can include switching your health insurance. As one provider notes,
“Sticking with an old plan that you’ve outgrown could stunt your business and stymie your recruitment efforts. The Health Reimbursement Account (HRA) that worked for your small, healthy 8-person team might now be unsustainable for your larger, more diverse workforce. New employee prospects may be turned off by a sub-par health plan. It might be time to consider a fully funded plan with both high-deductible and low-deductible options to meet your employees’ needs.”
Better health plan options are available
One of the best ways to stay on top of new and innovative health plan products and more competitive rates is to work with a broker. Otherwise, it is likely you will miss opportunities to change to a better, more affordable plan.
Keep in mind that, as a small employer, once you’ve chosen a plan, your premiums are typically locked in for a year. While you can add or drop employees and dependents anytime within that year, your premium will stay the same until the plan year ends.
J.C. LEWIS IS YOUR LOCAL PARTNER FOR GROUP HEALTH COVERAGE
J.C. Lewis Insurance has been a local, family-owned firm based in Sonoma County since 1979 and, as expert brokers, we offer small business group health insurance plans.
In addition, our firm only provides small business group health insurance plans from the leading health insurance carriers that are licensed to do business in California.
In addition to being experienced, professional brokers, we are licensed and certified by each of these insurance carriers to offer coverage to small group employers along with Medicare supplemental and prescription drug plans for seniors.
When you’re shopping for health insurance for your employees, or even vision and dental coverage, you probably have several questions and concerns.
J.C. Lewis Insurance Services welcomes your questions about insurance coverage, and we look forward to helping you find the right solution for you and your employees.