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How to Shop for the Best Health Insurance Plan

John McMalcolm

August 16, 2013

Choosing a health insurance plan for your employees can be a difficult decision.

If you decide to offer generous health benefits, you will have a significantly lower profit margin. On the other hand, skimping on health care may lead to employee dissatisfaction, which can make it more difficult for you to retain qualified employees. However, it is possible to get the best of both worlds.

Here are a number of things you can do to reduce the cost of health insurance without compromising coverage.

Avoid Providing More Health Benefits than Necessary

One of the reasons why some small businesses are overspending on health insurance is because they are offering more benefits than necessary.

It is essential that you know how to strike the right balance between minimizing cost and keeping your employees satisfied.

The best thing to do is to provide health benefits that are comparable to those offered by your competitors. This will reduce your risk of losing valuable employees.

Get As Many Employees As Possible to Sign Up

Similar to office supplies and other products, health insurance is more affordable if it is purchased in bulk.

As such, you should try to get as many employees as possible to enroll in your health insurance plan.

According to experts, small business owners can save up to five percent on their health insurance premiums if all their employees participate in their healthcare plans.

Start a Wellness Program

Keeping your employees healthy can lower your health insurance premium.

This can be done by establishing a wellness program that provides financial rewards and other incentives to healthy employees. Such a program may include the implementation of nutrition standards in the workplace, healthy living classes or a health newsletter.

Some insurance companies may be willing to help you start a wellness program for free.

Choose a HSA-Qualified Health Insurance Plan

A health insurance plan that qualifies for health savings accounts, or HSA, enables employees to pay their medical expenses with pre-tax income. Since this type of health care plan has a high deductible, it is usually less costly.

The Kaiser Family Foundation reported that small businesses that opt for HSA-qualified health care plans pay an average of $3,915 for individual coverage and $9,794 for family coverage annually, whereas those that choose non-consumer-directed plans pay an average of $4,621 for individual coverage and $12,400 for family coverage.

Renew During Off-Peak Season

Most businesses choose to renew their health insurance plans on New Year's Day.

Underwriters may get so busy that they will raise premiums for businesses that renew their health plans at this time of the year by one to three percent.

As such, it is recommended that you renew your health insurance plan about two months before or after New Year's Day.

Health insurance premiums can vary substantially from one insurance provider to another.

If you want to get the best deal possible, you should do some comparison shopping first before you choose your insurer.

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