2024 is expected to see the biggest spike in health benefits costs since 2012—and small to medium-sized businesses may feel the pinch.
For small businesses looking for group health insurance in 2024, the way ahead is looking rather bleak.
Employers expect they will be paying 5.4% more on health benefits in 2024—and that is after they implement changes to cut down costs. Many businesses are already struggling to strike the balance between enhancing health benefits—which is the most important job benefit for 51% of Americans—and managing costs—which are hitting a record high in the last decade. As such, insurance broker John Thornton of Insurance4Dallas believes it is more important than ever for small business owners to be informed of the health insurance options available to them.
Thornton has seen that three strategies, in particular, can help small businesses to both keep costs manageable and provide adequate coverage:
Enrolling in Small Business Health Options Program (SHOP)
Available to businesses with up to 50 full-time employees, SHOP offers employers full control over the amount they pay towards employee premiums and the coverage they offer. They can select health only, dental only, or both—and if they wish to cover dependants, too.
For businesses with fewer than 25 employees, the Small Business Health Care Tax Credit can reduce premium payments by up to 50%.
Taking Advantage of Incentives Through the Affordable Care Act (ACA)
The Affordable Care Act (ACA), which established the Small Business Health Options Program (SHOP), offers incentives and tax benefits to qualifying employers, which can amount to significant savings.
For instance, businesses that use a wellness program can reduce their health coverage costs by 30%, while those offering programs to reduce tobacco use can benefit from a 50% reduction in health plan costs.
Setting up a Self-Funded Health Insurance Plan
Self-funded insurance plans—which are not as strictly regulated as other insurance programs—allow businesses to customize coverage to the needs of the employee and the employer, leading to lower costs.
While self-funded health insurance was typically reserved for larger companies—due to higher financial risks—this has changed in recent years. Many Third-Party Administrators (TPAs) are now offering products that make it possible for small to medium-sized businesses to self-insure. This includes stop-loss coverage which refunds the employer for substantial claims and level-funded coverage which eliminates claims cost volatility—a common risk associated with self-insured plans.
As health benefit costs rise, big companies are already implementing measures such as narrowing their provider network and setting up wellness programs, and small to medium-sized businesses are expected to follow suit.
This content is provided in partnership with Insurance4Dallas and is intended for informational purposes only. The views, opinions, and advice expressed in this article are solely those of Insurance4Dallas and do not necessarily reflect the views or policies of any other individual, organization, or entity.
Company Info
Name: Insurance4Dallas
Organization: Insurance4Dallas
Address: 4516 Lovers Lane Suite 316,Dallas, TX, 75225, United States
Website: https://insurance4dallas.com/
Phone Number: +1 972 219 6004
Main Contact Person: Rick Thornton
Email: Mail@insurance4dallas.com
