When the economy is doing well and unemployment is down, there can be a lot of pressure on small businesses to provide health insurance to both attract and retain employees. Meanwhile, these same businesses are grappling with rising premium costs, changing regulations and uncertainty in how the health care markets will respond. In addition, it looks as if the high deductible health plan model may be here to stay, which shifts more costs to employees.
There may be another way through the health care squeeze, though. When paired with a typical health insurance plan, supplemental insurance offerings can help small-business owners reduce their health care costs, adequately protect their workers and attract talent.
Both Business and Labor Deal With the Rising Cost of Care
Certainly, small companies face many pressures related to health insurance.
- Companies with 50 or more full-time employees are required to provide insurance to their staff.1
- Small businesses are feeling the pinch of minimum wage increases.
- Small businesses feel compelled to offer competitive health care packages to attract and keep top talent.
Meanwhile, today’s health care packages put a lot of costs on the health care consumer – the employee.
- Workers still pay high premiums, deductibles and copays that can result in significant, unexpected and unreimbursed medical expenses.
- Workers must often deal with substantial non-medical costs resulting from unexpected illness or injury.
When offered by employers to workers, supplemental insurance can fill in the gaps in traditional health care coverage, no matter what type of health insurance is already offered. Notably, health care costs associated with accidents, critical illness, cancer and hospitalization are some of the most expensive, particularly as health care providers seek to shift costs to consumers. So, if a small business opts to provide a lower-cost health plan, it can offer supplemental insurance solutions to make its benefits package more comprehensive and competitive, while lowering overall costs.
Which Insurance Does What?
Accident insurance covers treatment, urgent care and hospitalization for a variety of major and minor off-the-job accidental injuries. Cancer policies offer a lump sum for certain procedures, screenings and treatments. Critical illness insurance provides payments to employees suffering from such ailments as stroke, heart attack or Alzheimer’s disease. And hospital indemnity insurance offers payments to employees admitted to the hospital for a wide range of covered injuries and illnesses.
Small businesses are feeling the pinch from rising costs related to health care and labor, while overall coverage reductions and deductible increases are hitting the employee where it hurts. Fortunately, supplemental insurance options can alleviate some of the highest health care costs — those related to accidents, critical illness, cancer and hospitalization. When used as part of a comprehensive benefits package, supplemental insurance solutions may reduce overall operating costs for business owners, helping them attract the talent they need to stay competitive while keeping employees covered and healthy. Learn how group benefit plans can help small businesses grow.
1 “Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act,” IRS, November 30, 2017