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Choosing the Right Health Insurance for Employees While Saving Money

By Mariah Collins, SHRM-CP on Jul 20, 2021
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how to choose the right employee health insurance

For many small and mid-sized business (SMB) owners, the inability to offer competitive employee health insurance is one of their most frustrating challenges. This is especially true when it comes to recruiting high-quality candidates for open positions. SMBs can usually compete with larger organizations on starting salaries. Unfortunately, they have difficulty offering a lower health insurance premium and better benefits because they lack bargaining power.

Axcet HR Solutions is an employee benefits consultant in Kansas City that helps smaller employers obtain health insurance for employees that they can afford. As a professional employer organization (PEO) and co-employer for our clients, we bring a larger pool of potential insureds to negotiations with health insurance carriers. That means companies partnering with Axcet have better access to Fortune-500 style benefits despite their size

SMBs Can Take a Hands-Off Approach with Health Insurance for Employees

At Axcet, our benefits professionals research multiple employee health plan options to find the one that is right for your company. We then present clients with several plans and explain the options available with each one. If the client opts not to select any of the plans we present to them, we return to the insurance providers to obtain additional proposals.

Once clients select their health insurance options, our team handles all these administrative tasks going forward:

  • Prepare all open enrollment processes and materials
  • Present a full meeting to employees at the client company about their options and offer them an opportunity to ask questions
  • Assist employees in the enrollment process as needed

We also ensure that our clients remain compliant with the Affordable Care Act if it applies based on the number of employees.

In this blog, we highlight some of the most important features to look for when choosing health care benefits for employees. Although clients remain in charge of choosing employee health insurance benefits, our organization does the legwork by negotiating for the lowest rates and presenting clients with various options.

Choose a Plan Offering Substantial In-Network Savings

Employees are accustomed to choosing an in-network provider and understand they will pay a higher deductible and co-insurance percentage when they visit an out-of-network provider. Recent research by the employee benefits industry indicates that most employees prefer lower premiums and out-of-network costs to having a larger pool of available doctors.

Health insurance companies typically allow participants to see a specialist without a referral when they stay within their network to receive care. The cost savings extends to employers because they do not need to pay for access to a larger network of care providers their employees would likely not visit anyway.

the three things small businesses need to know about offering health

Consider the Typical Demographics of Employees

SMBs have a certain advantage when it comes to selecting health insurance for employees because buying for a smaller group can be a simpler process. Employers should consider the average age of their employees and whether they tend to be in good health when selecting a plan.

If most employees are young and healthy, it makes sense for employers to choose an insurance plan offering a lower monthly premium in exchange for a higher deductible. On the other hand, an older employee group that accesses health care services more often would likely be willing to pay more each month but less when the bill for services comes due.

Technology Matters in the Lives of Busy Employees

Just as today’s worker expects online access to payroll and paid time off information, they also expect arranging and receiving health care to be as convenient as possible. Look for insurance providers that offer such services as:

  • Access to online resources to improve health
  • Digital monitoring of chronic health conditions
  • Online appointment scheduling
  • Retail clinic availability
  • Online access to medical records, health trends, and provider notes from previous visits
  • Telehealth availability to receive a diagnosis and prescription for non-urgent conditions like strep throat or pink eye
  • Urgent care availability with convenient hours

How Employers and Employees Can Save Money on Health Insurance

Kaiser Permanente conducted a survey about health insurance costs for the calendar year 2019 that showed high average costs that did not come as a surprise to employers and employees. The average cost to provide coverage to a single employee was $7,188 that year while the family coverage median cost was $20,576.

Many of our clients at Axcet HR Solutions have told us that shouldering this full cost is unrealistic for them. That makes sense when considering that the typical SMB contribution towards employee health insurance already makes up at least one-third of the overall compensation package.

Offering employees a Health Savings Account (HSA) can reduce out-of-pocket health care costs for employees. HSA accounts pair with high-deductible health insurance plans to provide employees a way to reduce expenses.

Each time employees incur an expense, they can use funds in their HSA account to pay the bill on a tax-free basis since the Internal Revenue Service (IRS) does not tax income used for this purpose. There is also no need to use HSA funds by the end of the year, and any money that does rollover can earn interest.

Providing employees with a Cost Estimator tool allows them to know the cost of a procedure before obtaining it. Using this tool empowers employees to compare doctors and rates to receive the best services for themselves and their family members.

Lastly, offering an employee wellness program encourages people to take a proactive approach to manage their health while also reducing claims. Examples include smoking cessation programs, weight loss programs, gym memberships, and mental health counseling. The benefit of including these perks as part of a health insurance package is an overall improvement in employee health and productivity.

Schedule a Consultation with Axcet HR Solutions Today

Benefits administration, including health insurance, is just one of many client services we offer here at Axcet HR. We invite small and mid-sized business owners in the Kansas City area to request a consultation to learn more about the dozens of PEO services we offer under the umbrella of employee benefits, human resources, payroll administration, and risk management.

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