How to Achieve Flexible Benefits at Your Small Business
By: Jordan Jolley (Zane Benefits) December 2014
In a time when health benefit costs can be almost unimaginable, your small business faces a difficult decision: keep your current group health insurance plan, or offer nothing at all. The truth is, not offering health benefits to your employees hurts your small business in the long run. So what’s the solution? Offer flexible benefits – here’s how.
Why Flexible Benefits are Important
You may be wondering, “what are flexible benefits and why would they be important to my small business?” Flexible benefits are health benefits that accommodate your entire workforce. Rather than a one-size-fits-all plan, they allow employees to customize health benefits to their unique lifestyle and needs.
Think of it this way: your small business may only have 15 employees, but some of them may be Baby Boomers and others are from Generation Y. Each generation has different needs and values. If you offer the same health benefits plan to all of them, it may not accommodate their specific needs. For this very reason, flexible benefits allow you, as an employer, to offer something for everyone at an affordable price.
The Old Way
Flexible benefits weren’t always readily available and things have changed a lot over time in the healthcare industry. At one time, businesses were able to offer a group health insurance at an affordable price. It was the way that individuals got health insurance. However, things have changed. For example, from 1999 to 2014, employer-sponsored health benefits increased by 174% for a total annual single premium. In dollar amounts, what was $183/month in 1999 increased to $502/month by 2014.
These increases were far from affordable to individuals and small businesses that needed good, quality healthcare. Additionally, group health insurance offered little to no room for flexibility- employees were left with a one-size-fits-all plan. However, as group health insurance prices continued to increase, solutions were beginning to surface: individual health insurance reimbursement.
The New Way
Nowadays, there is a better option to achieve flexible health benefits for your employees – individual health insurance reimbursement. Though group health insurance premiums continue to remain unaffordable at an average of $502/month for a total annual single premium, individual health insurance averages $82/month after premium tax credits
Now you must be wondering, “what is individual health insurance reimbursement?” Individual health reimbursement is exactly what it sounds like. Your employees go to the state’s Health Insurance Marketplace and purchase a plan (just like car insurance). You reimburse employees for their monthly premium costs up to an amount that you specify (e.g. $150/month).
Offering individual health insurance reimbursement to your employees is the ultimate way to achieve flexible benefits for your small business. Doing so allows all demographics of your business to choose a plan that fits them best and is affordable, too. Also, offering flexible benefits is a great resource to retain and recruit top talent for your small business.
