In today’s job market, it is much more challenging to find work in a field you love. But what makes this task even harder is the fact that many businesses must balance personal finances while also staying afloat. As a small business owner, you may not have the luxury of hiring an accountant or administrative assistant. However, as a savvy business operator, you understand that there are always ways to streamline your company’s expenses. Reducing your expenses on health insurance will immediately impact your bottom line and help your budget stretch just a little bit further each month. Here are three ways that you can save on health insurance as a small business owner:
Check your eligibility for Small Business Health Care Tax Credits
Small businesses that purchase their own health insurance plan can qualify for tax credits to help pay for their coverage and reduce the associated costs. The Small Business Health Care Tax Credit is available to businesses that provide health insurance to their employees and paid $25,000 or more in health insurance premiums in the previous year. Small businesses can claim this credit on their federal income tax return when they file their taxes in the spring. The amount of the credit depends on the number of employees and their health insurance premiums. The maximum amount of the credit is 50% of the premiums paid. Businesses with less than 25 full-time employees and an average annual wage for all employees of less than $50,000 are eligible for a tax credit of 35%. The credit percentage increases for each additional employee.
Negotiate rates with your current insurer
Depending on your business’s size, industry, and claims history, insurers will negotiate different rates with your business. If you are currently insured, talk to your agent about negotiating lower rates. This is an especially effective strategy for small businesses that have good claims histories. You may be surprised to find that your insurer is willing to negotiate. This is often a great way to get your rates down, especially if your company is young and healthy. The best time to negotiate a lower premium rate is before your policy renewal date. If you renew your policy without attempting to negotiate a lower rate, you will be locked into your current rate for the next year.
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Shop around and compare quotes from other insurers
If you have been insured for a few years and have a good claims history, it may be time to shop around for new rates. Every year, your business will be assessed for rates based on your claims history and the estimated risk that the insurer assumes by insuring your company. As your business becomes increasingly more profitable, many insurers will increase your rates as a result. If you shop around and find a more affordable health insurance rate, you should make a note of it in case you need to be insured in the future. Many businesses keep a spreadsheet of quotes from health insurance companies in case they need to be re-insured in the future.
Find ways to reduce company healthcare costs for employees
Health insurance is a necessity in today’s economy. While it is not something that you want to skimp on, it is also a cost that many companies try to reduce as much as possible. There are many ways that you can reduce your company’s health insurance costs for employees. Here are some ideas that may work for your business: – Negotiate higher eligibility requirements for employees. If you currently have very lenient health insurance requirements for employees, try to negotiate a higher standard for eligibility. This will reduce the number of claims that your company will have to pay. – Offer a high-deductible plan with a savings account. If your employees are young and healthy, a high-deductible plan with a health savings account may be a better option for you. This will reduce the amount of money paid into the health insurance plan while giving employees a chance to save money for future healthcare costs. – Offer a telemedicine plan. Telemedicine is often less expensive than visiting a doctor in person. This makes it a great option for telecommuting employees who may not visit a doctor very often.
Conclusion
As a small business owner, you are in an excellent position to negotiate rates, shop around, and find ways to reduce company healthcare costs. Reducing your expenses on health insurance will immediately impact your bottom line and help your budget stretch just a little bit further each month.