Health Insurance Costs: Solutions for Smaller Businesses
Small and medium-sized businesses can reduce health insurance costs by sharing some expenses with employees and raising deductibles and co-pays.
Phillip M. Perry (Web Exclusive/Feb 09)
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Coalitions Can Lower Expenses
alone, the single employer has limited negotiating clout with
healthcare providers. For groups of employers, the story is much
different. Healthcare coalitions can often help reduce the expenses
associated with such programs as drug and vision benefits, dental
plans, and disease management. In some cases, coalitions offer health
insurance itself at a reduced rate by bidding their employer members as
a block to carriers.
"There is a simple dynamic in any
marketplace," says Webber. "If you can aggregate your purchasing power,
then whoever is producing a good or service is willing to reduce the
cost of that service."
Coalitions offer another benefit besides
lower cost: the greater choice otherwise available only to large
organizations. Employees of the 160 member organizations of the New
York Business Group on Health (NYBGH) can select the plan they want
from 26 healthcare options, plus dental, long term disability, life
insurance, and accidental death and dismemberment coverage. "We allow
the small business to offer big business benefits," says Laurel
Pickering, the group's executive director.
Informed Employees Are Healthier
costs, cutting benefits, and joining coalitions can help tame the
health insurance monster. Change can be frightening, though, and
employers need to maintain open lines of communication with workers to
avoid affecting morale.
"It's a mistake if employers do not
adequately communicate health benefit changes to employees, along with
the reasons why changes are being made," says Natchek. "People need to
feel they are partners. They need to understand the true cost of health
care, how their actions can make a difference and how they can become