Ask The Business Doctor - "one of my largest costs is healthcare...

Question: "One of my largest costs is healthcare. I’ve got a standard plan that’s going up 23% next year. Any suggestions?” John M., Buffalo

Answer:

You're not alone. Almost every business, large or small, has been struggling with escalating costs for employee healthcare. Here are three alternatives:

1) Reduce your Company's contribution. Very few companies still cover employee healthcare 100%. The current range is typically 50-75%. Reduce your company's percentage contribution or substitute a fixed dollar contribution, adjusted annually for inflation.

2) Focus on Wellness. NY companies with 50+ employees have "experience-rated" insurance reflecting their actual claims. An aggressive employee wellness plan can result in a healthier workforce, fewer claims and lower healthcare premiums.

3) Install a Healthcare Savings Account (HSA). These combine high-deductible insurance (~60% of a 'normal' premium) with employee-owned HSAs. The idea is to make employees careful consumers of healthcare by requiring them to pay all expenses up to the annual deductible out of a pre-tax HSA. Anything employees don't spend they keep.

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