Published December 1, 2008

Small Business Healthcare: Protect Your Employees

The fact is that your employees do need health insurance and it might cost a lot less than you think to offer your employees this important benefit.

That is not to say that health coverage is cheap. Since there are fewer employees to cover, small businesses end up paying a much higher premium per employee than big businesses.

Still, offering small business health insurance coverage is important if you want to get and keep the best employees. One of the most obvious ways to save on health insurance costs is to have your employees take on a bigger portion of the premium.

For most employees, this is going to be a better option that having no coverage, but there are other ways to trim the cost of your small business healthcare.

Shop Around

It sounds painfully obvious, but many business owners fail to do this. There are some companies that offer small business health insurance at a discount.

Even retail warehouse Costco offers its business members health insurance coverage for their employees.

Find a Group

The more employees you have, the lower your health care premiums will be.

If you are a small business, consider partnering with other businesses to increase the size of your group and, therefore, lower your premiums.

Offer a Health Savings Account (HSA)

This is a great alternative for small businesses that cannot afford to offer the highest quality coverage.

Under this plan, employees contribute to a savings account. The money can only be used for medical expenses, and it is not taxed when it is deposited or upon withdrawal.

Because there are rules governing a minimum deductible before you can offer health saving accounts, this is an option that can help to reduce the cost of your premiums.

Currently, the accounts do not expire and can be taken with the employee should they decided to leave the company.

Still, since laws are always changing, you should check with your accountant or lawyer to verify the current laws regarding health savings accounts.

Reduce Benefits

This is another way to reduce the cost of your small business health insurance - and it is not going to be popular with your employees.

While preferable to no coverage, reducing benefits is not going to do anything positive for morale and may be reason enough to send some employees on a job search.

Still, cutting or reducing benefits such as dental or vision may be what it takes in order to be able to afford coverage.

While there are a few ways to reduce the cost of health insurance premiums, the bottom line is that such costs are part of the cost of doing business.

Offering health insurance is still optional for small business owners (but who knows when that could change), but offering such coverage provides important protection for your employees.

If you want the highest quality employees you are going to have to offer insurance coverage. Talk to your employees about which benefits are most important to them, and find a plan that is best for everyone.