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Tips On Ways A Small Business Can Lower Its Health Care Costs
By Murray Glick
If you're one or the growing ranks of Americans who own a small business, you know how expensive it is to get comprehensive health care coverage. Oh sure, it's available... just not at the same price that large businesses pay as they qualify for group rates.
Worse yet, the premiums which small businesses (less than 200 employees) have for heath insurance coverage is increasing at twice the rate that it's increasing for large (500+) employees according to William M. Mercer Inc., a consulting firm specializing in employee benefits. Not surprisingly, an estimated 40 percent of small-business owners do without insurance, according to the Insurance Information Institute, because they believe they can't affordit.
Because of their high price, too many self employed individuals settle for health coverage that is inadequate. Such business people are threatening not only themselves but their family's health, but also their business' very existence should they ever become injured or seriously ill.
THE GOOD NEWS
If you're planning to leave or recently have left full-time paid employment, you can still retain your existing health insurance thanks to a law known as COBRA (Consolidated Omnibus Budget Reconciliation Act) of 1985. COBRA can provide a bridge for the newly self-employed as it allows you to retain the same insurance coverage at the same price that you had before. As a former employee using COBRA, you have to pay the full premium that your employer was previously paying or supplementing. That is still cheaper than an individual policy, since the coverage is purchased at a group rate. When it expires, you have the choice to continue with that same plan -- at an individual rate.
The problem is that COBRA only lasts 18 months, and after that those who are self employed are on their own. However, there are some options that self employed business people have to reduce how much they pay for healthcare coverage. These health care options are:
Whether shopping for the lowest health insurance rates or wanting to ask medical questions of experts,learning to do research on the internet can make you a more informed consumer, thus bettering your chances of lowering your health care costs. The better educated you are about health care, the more you can avoid unnecessary and/or expensive medical insurance.
2. Get Coverage From Your Employed Spouse
A common and easy way to get long term health coverage is to add yourself to your employed spouse's existing policy, and use the extra premiums you'll have to pay as a tax-write off.
3. Join With Other Self Employed People
There are strength in numbers so investigate joining a professional or trade organization that offers its members coverage at a group rate discount. Two such groups are the National Federation of Independent Business and the National Association for the Self-Employed. However, before joining a group just for its health insurance plan, one should consider the cost of membership in addition to the insurance premiums.
4. Lower Your Level Of Health Insurance Coverage
If you are healthy and don't require much medical care, why give the money to the insurance company for low-cost claims when you could keep it yourself? If you choose a higher deductible or a higher co-pay, the money you save in monthly premiums might actually be more than you spend out of your pocket in a year.
5. Reduce Your Chances of Getting Sick
7. Consider Being Part Of An A.H.P.
8. Cut Down On Contributions.
9. Join A Discount Health Benefits Program
Rising medical insurance costs force many self employed professionals to eliminate coverage in areas like dental, vision and prescription drugs. But these benefits are included when one enrolls in a discount health benefits program, as any gaps in the self employed coverage (typically dental, vision and increasingly prescription drug) are eliminated. Due to their ability to supplement existing health insurance, discount health benefit programs must be considered a strong health care alternative for the self employed.
SELF-EMPLOYMENT OPTIONS
Murray Glick is assistant webmaster at DiscountDental4U.net and frequently writes about issues dealing with health and dental coverage. Born in 1962, Mr. Glick grew up in Livingston, New Jersey, where he attended public school and eventually went on to graduate with a BA in English literature from Case Western Reserve University out of Cleveland, Ohio. Mr. Glick has worked in many different jobs over the years including proofreader, newspaper editor, public relations and currently is employed by Prudential Insurance as a communications officer select. In addition to DiscountDental4U.net, Mr. Glick assists webmaster Kenneth Kowalsky in maintaining a web blog --http://discountdental4u.blogspot.com-- in which he writes about how to stay on top of the changes in modern dental health.
You know the old saying about an ounce of prevention being worth a pound of cure? Well, this is especially true when it comes to reducing your health care costs. According to Marilyn Furry (Associate Professor Of Extension Education - Penn State's College of Agricultural Sciences), the best advice to follow to avoid high health insurance premiums as well as out-of-pocket health care expenses is to do the following:
6. Take Advantage Of Tax Incentives
If your business is incorporated, your costs and your employees' costs are entirely tax deductible. If you aren't incorporated, you're not out of luck - a portion of your costs are tax deductible.
Small businesses owners are joining together in A.H.P. (Association Health Plans), to get deals from insurance companies. "Power in numbers" is the theory behind these groups. To find out if there's an AHP in your state, check with The Association Healthcare Coalition.
Your employees will most likely expect you to contribute to the cost of premiums, especially since the majority of small businesses do. But if it's absolutely impossible for you to fit contributions into your budget, at least look into insurance plans to get a group rate for your staff.
Perhaps the best way to cover any existing gaps in your health insurance is to join what is known as a "Discounted Health Benefits Program" such as AmeriPlan. These clubs offer their membership deep savings on medical and dental visits, prescription drugs, and other health services by connecting members with hospitals, clinics, doctors, dentists, vision care providers, and chiropractors that are on the plan.
As the number of self employed people grows, so will their collective politcal and social power. Perhaps the best advice to give a advocates for better health care options for the self employed is to keep informed about changes in the small-business benefits arena. Organizations such as Working Today and the National Association for the Self-Employed are building networks and lobbying Congress to improve access to better health and retirement plans for independent professionals. Consider lending your voice to theirs and maybe someone will here you.
