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It's Time to Take Control Over Rising Healthcare Costs!

If you own your own business it's now time to take control over your and your employees Rising Healthcare cost.

As group health insurance premiums are on the rise, employers are looking for new options so here's another tool from the toolbox.  Here's an example for an employer with 10 employees who can no longer afford the group rates.  What if the employer were to drop the group coverage and give each employee a set dollar amount in their FSA (Flexible Spending Account or Cafeteria Plan) to be used for whatever individual insurance they want?  This way the employer controls his/her cost and the employees are still provided with a great tax-free benefit.  With this FSA setup, the employees could even contribute their own dollars towards insurance, out-of-pocket, or daycare. 

Another option would be to keep the group insurance but have the employees cover more of the premium costs.  At the very least the employer could set up a Premium Only Plan (POP) to make those employee dollars tax free.

Still another option for this same employer would be to move to a higher deductible plan and cover the difference with a HRA (Health Reimbursement Account).  For example if the employer moved from a $500 deductible to a $2,000 deductible plan, he/she would save substantial premium dollars.  Then he/she could supplement the difference in deductible by offering to fund an HRA for each employee from say $501 to $2,000.  To the employee they are responsible for the same $500 as before but now the employer can save a lot of money on premiums.  The average utilization rate for HRAs is around 20-30%, so the employer still provides great benefits and coverage. 

Call me to discuss your specific concern over rising healtcare costs and we can schedule a design session to address your specific need.  Call (503) 643-6955 x211 or Email GaryB@trustedCPA.com .