Small businesses should consider self-funding their health insurance programs in order to lower their premiums. Small businesses should also look into QSEHRAs, which are tax-deductible health reimbursement accounts. These accounts can be a great option for small businesses because they provide more flexibility. Also, high- deductible plans tend to have lower premiums and incentives for using in-network doctors.
Self-funded plans offer more flexibility
While fully insured plans have their benefits, self-funded small business insurance plans provide more flexibility. While self-funded plans are subject to less government regulation, self-funding also allows for more flexibility in deciding which benefits are right for your employees. By paying for only the health care costs of your employees, you can save money that you can use for other business expenses.
A key benefit of self-funding is the greater control over utilization and claims data. Fully insured plans must share their data with their employers, but with self-funding, the employer can choose which information to share. This means that the data can be customized to fit the goals of the plan. For example, a company can create a wellness program and tailor its benefits accordingly.
QSEHRAs are a good option for small businesses
A QSEHRA can help small businesses pay for insurance for their employees. It is a tax-deduction plan for employers that reimburse employees for eligible health care costs. Unlike traditional group health plans, a QSEHRA is a tax-free benefit that employees cannot double dip on. Generally, a QSEHRA reimburses employees up to five thousand dollars per year for individual health coverage, and $11,000 for family health coverage.
Small businesses can choose QSEHRAs for a number of reasons. The first is that QSEHRAs can be tailored to cover only certain types of medical expenses. This way, if a group plan doesn’t cover these costs, employees aren’t left with a financial burden of unpaid premiums. It also provides flexibility for employees, allowing them to choose the best plan for their needs.
High deductible plans offer lower premiums
Small business insurance companies often offer high deductible plans with lower premiums. A higher deductible means that a higher portion of the cost of healthcare is shared among all parties, but this can create an unpredictable situation. For example, a $500 deductible is different from a $5,000 deductible, which makes it harder to predict your expenses. However, the lower premiums are attractive to some businesses.
One major advantage of high deductible health plans is that they are often paired with a Health Savings Account. This means that you can build up money in an account to cover the difference between your coverage and your deductible. This means that you can spend less money each month and still have higher quality care.
Physician-hospital organization plans offer incentives to use in-network doctors
While Connecticut has implemented a law requiring health insurers to pay preferred provider network rates, some hospitals have declined to participate. Connecticut is attempting to get more health systems to accept contracts that include cost and quality metrics. In addition to requiring preferred provider network rates, the state is pushing for contracts that include quality metrics and volume-based payment.
The Seattle plan is not yet a threat to specialists. Its low market penetration has prevented many specialists from reacting negatively to the plan, but this could change in rural areas. A possible backlash by specialists would threaten the expansion of primary care physician network plans in rural communities.
