Small Business Healthcare: Resources for Funding

Small businesses will be required to meet certain insurance standards for their employees as of 2014, which include more thorough healthcare coverage and more employees being covered overall. This may concern many small business owners, unless they have a health care MBA, as they will need to find new ways to afford their small business premiums while keeping their employees happy with their benefits at the same time.

Luckily, there are many options for small business owners that need to pursue alternative resources for funding and there are some government initiatives that can help.

The health plan will cover you and up to three dwarves - healthcare cartoon

Flexible Funding Through Insurance Carriers

Insurance providers are offering a myriad of different insurance funding options for companies that are concerned about their increased insurance costs. Flexible funding options allow small businesses to pay only for the insurance they need while set rate funding options give businesses an exact premium to pay every month. The funding options offered by insurance carriers are geared towards allowing companies to maintain the required insurance coverage while reducing overall costs. Graded funding plans give companies the ability to only pay for the actual claims that are levied against the health care policy, and this can be much less expensive for a company overall.

Engaging in a Purchasing Cooperative

Business owners may be able to save money by joining up with a purchasing cooperative. Purchasing cooperatives are groups of smaller companies that get together as a group to give themselves more bargaining power than they would otherwise have with the insurance companies. Cooperatives are more common in major metropolitan areas such as Los Angeles and New York, but they exist throughout the United States as a way to get lower insurance premiums and better coverage overall. A purchasing cooperative is also usually beneficial for the employees as well, as it gives them additional healthcare options and benefits that they would otherwise not receive. If you are in an industry that needs to have very competitive benefits, the bonuses offered through a purchasing cooperative could help you retain your talent.

Creating an Employee Wellness Program

Many companies have found long-term success through employee wellness programs. Premiums go up based on the amount of claims levied against an insurance policy, and employee wellness programs have been found to greatly reduce the amount of claims necessary by employees. By increasing your employee’s health consciousness, you may find that your employees will need less medical care overall and will also be healthier and happier. Some studies have shown that an employee wellness program can create additional benefits as well, such as more productive employees and less requested time off.

Small Business Health Care Tax Credits

Some businesses will qualify for tax credits at the end of the year. Companies will need to have to have less than 25 full-time employees to qualify for these tax credits and these employees will need to be paid less than $50,000 per year. The tax credits in 2014 will be given on a sliding scale and will be up to 50 percent of the company’s insurance costs. The smaller the business is, the larger the benefits will be. This tax credit can easily cut insurance costs in half for a small business, but small business owners should consult with their tax accountant before assuming that they will qualify for it.

Small business owners that are concerned about funding new insurance policies may want to renew their insurance policies early to retain their current rates. Business owners that renew their insurance policies before 2014 will be able to delay obtaining a new insurance policy for a year, giving them more time to arrange funding.

About the Author: This article is written by Ravinder Sahu