Business Matters September/ October 2017 | Page 18

GUEST CONTRIBUTOR
chamberthink
A
s you are probably aware, health insurance costs are now the sec-
ond highest expense a small business has after payroll. CNN Mon-
ey: “Health Care Costs Rise by Most in 32 Years.” Prices for medicine,
doctor appointments and health insurance rose the most last year since
1984. A recent report by forecasts that next year the average family
premium will be $18,142.
THREE WAYS TO REDUCE HEALTH INSURANCE
COSTS FOR YOUR COMPANY AND EMPLOYEES:
1.
DEFINED CONTRIBUTION STRATEGY
Traditionally an employer chooses the health plan their company will use and decides
how much they can afford to contribute. It normally runs 50 – 100 percent of the cost
of employee-only coverage. Options are limited offering only one or two plans from
which employees can choose.
Defined contribution plan offers more options. However, instead of your business
contributing a certain percentage toward your employees’ health coverage, you con-
tribute a flat dollar amount (what is known as the defined contribution). From there,
employees have the freedom to choose any plan that best fits their needs. But since
your cost is fixed, the employee simply pays the difference if they choose a richer
benefit.
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BUSINESS MATTERS
SEPT/ OCT 2017