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Do you own a small business / SMB? Your cost of offering health insurance is a huge cost of business for any company. And, it can be an even bigger hassle for small business company owners when securing business insurance. With the continued rise of premiums, many smaller businesses may have to force the extra expense onto their employees.

Sadly, some business owners have been forced to eliminate their employee medical coverage completely. A recent statistic shows that 60% of people without health insurance work at a small business. In the United States, this problem is getting worse. For a smaller company, the costs are greater per employee than for a larger company. This difference can be 18 percent according to some authorities.

You’re a small business owner, so how do you fight this rising cost?

It may be hard to find a thorough solution, but consider the following ideas. These can help you reduce the cost of providing medical coverage at your small business:

1. Offer a wellness program

Keep your employees healthy. Healthy employees are more productive. Investing in programs such as: smoking cessation, cancer screening, flu shots, etc. can return as much as $4 for every $1 invested. For some larger companies, a wellness program has netted them savings of more than $700 million in the long run.

* Keep in mind, these kinds of programs usually aren’t free. But, in comparison, it can end up being a cost-saver for some owners.

2. Health savings accounts

Health savings accounts are usually for those in plans with higher deductibles. These accounts allow workers to deposit income into an account set aside for medical expenses. They get a tax break on contributions and withdrawals. The business owner can also make tax-free contributions, but they aren’t required to do so.

* The account deductions are eligible to place on a 1040 tax form without having to itemize.

3. Reduce the coverage

This option may not be popular with employees. However, cutting the amount of coverage or requiring employees to pay more of the premium may be the best way to continue to even have a health coverage offering.

* Talk to your employees. See if a compromise can be reached. They may be willing to give up dental or vision in order to keep their costs the same.

4. Join or start a group

FYI, insurance premiums for a business with over 25 employees are less than for a company with less than 25 staff members. In real-world terms, the bigger the group the better. If your state government laws allow it, you could join up with other businesses to get a lower rate. Depending on the group size, the savings could be big.

5. Shop Around

First thing, call your local independent insurance agent. The agent can do the shopping for you. Besides, he’s the expert, so get his advice. If you’re in Texas, call Hettler Insurance Agency; their expertise and service are free. The insurance agency can tell you which companies fit your business. With a little help, you could find the perfect policy for your employees. You could also talk to other small business owners and see what kind of coverage they offer to their workers.

Yes, offering medical insurance can be expensive. But, if you provide an affordable rate to your employees, then retention will improve. And, with a good benefits package, you can attract better talent.


Remember, if you pool your resources together with other small business owners, then you may qualify for a large-group rate. That large-group rate can help you offer more affordable health insurance to your employees. It’s possible that you could save $100 or more per employee. Consult your local independent insurance agent and state laws to see what’s permitted.

Small business owners’ medical insurance offerings can be tricky, but with a little searching, you can usually find a workable solution. If you’re able to, then it’s good for business if you offer affordable healthcare to your workers. They’ll stick around longer and be more productive.