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Small Business Employee Benefits and HR Blog

How Can Small Businesses Offer Affordable Health Insurance?

If you run a small business, an innovative, cost-effective solution to a persistent challenge can easily be the difference between thriving and merely keeping the doors open. With a challenge as complex as health insurance, the stakes are even higher.

Between fulfilling governmental guidelines, keeping costs at a reasonable level, and attracting and retaining high-quality employees, small businesses find themselves in a tenuous situation. To offer affordable health insurance that employees actually want, small businesses absolutely need creative solutions that level the playing field.

Big businesses have long enjoyed the ability to offer robust group health insurance plans, which traditionally have provided a distinct advantage in the recruitment of talented professionals. However, the industry has changed. The Affordable Care Act and subsequent healthcare exchange are part of a new story for businesses that employ just a small number of people.

It’s a story of affordable health insurance that fits each person’s unique circumstances.

No two businesses — or individuals — are exactly alike.

No two businesses are exactly the same — and neither are any two people. Old-school group healthcare plans are just as complex, time-intensive, and inflexible for talented potential employees as they are for small businesses.

Does one size fit all for managers of companies both large and small? No. In the same vein, no two employees have the same mix of medical, dental, and vision needs.

Be flexible and offer freedom.

Today, people seek a personalized experience in everything from dining out to ordering shoes. Those expectations are no different regarding healthcare and insurance coverage.

It’s about meeting a person’s specific needs without paying for anything unnecessary — especially considering the drastic changes in premiums over the past several years. The $17,545 average annual family premium in 2015 is 27% higher than in 2010 and 61% higher than in 2005, according to a report by the Kaiser Family Foundation.

Forward-thinking, flexible approaches to small-business health insurance utilize what’s available, maximize benefits, and reduce waste for each employee and employer. For instance, Zane Benefits uses the proliferation of individual policy options in the marketplace to provide highly cost-effective Defined Contribution Health Plans.

Defined Contribution Health Plans are an affordable alternative to employer-sponsored group health insurance plans, largely because they give freedom and control to individuals while allowing small businesses to offer tax-free medical reimbursements.

Businesses and individuals find savings in the same place.

With the emergence of Defined Contribution Health Plans, large companies no longer hold all the power when it comes to benefits packages. The ZaneHealth online solution allows for a collaborative process that yields sizable cost savings for small businesses and the people who work for them.

  1. The company sets a monthly allowance — based on a variety of personalized factors — that accrues in each employee’s healthcare balance.
  1. Employees use a private exchange or insurance marketplace to choose a policy with coverage and benefit levels that are right for their unique needs.
  1. The company uses the ZaneHealth software to reimburse employees for their health plan costs, up to their account balance.
  1. Reimbursements are tax-free, saving money for employees and the company alike.

Conclusion

At a time when implementing a group insurance plan is increasingly costly and complicated, Defined Contribution Health Plans are proving to be the cost-effective solution small businesses have been looking for to stay competitive and attract the high-quality professionals they need.

Weigh in with your opinion. Leave your comments and questions below.