What Your Broker Isn’t Telling You About Saving Money on Group Health Insurance
More and more business owners are frustrated with the ever increasing cost of group health insurance. This year alone, many insurance carriers are raising premiums close to 18% and over the last 10 years, insurance premiums have increased over 96%! Small business owners need an affordable and comprehensive health plan to attract and retain quality employees but with healthcare costs spiraling out of control business owners are paying more and getting less.
A Health Reimbursement Arrangement (HRA) can offer a significant savings in health premiums to the small business owner that is looking to reduce his or her costs. Traditionally HRA’s look like the old “self funded insurance plans,” but today they go way beyond the self funding concept and offer a business owner better control over insurance premiums and health care expenses. And most importantly, they can save big dollars on group health premiums. The savings for a business owner can be dramatic with an HRA, sometimes up to 30%!
However, Health Reimbursement Arrangements (HRA’s) are not for everyone. HRA’s work best for companies with 10 or more employees that have a good “claims” history. If your work force is older and many of your employees are submitting several healthcare claims on a regular basis, an HRA may not be a good option for your company.
But why aren’t most brokers telling their clients about HRA’s? Most brokers are looking for the easy sale and implementing an HRA is not an easy sale. First you need a good administrator to run the plan and that is an additional cost. Secondly, explaining to your client that they will be reimbursing some of the healthcare expenses to their employees makes most brokers not even want to discuss an HRA. But even with the additional admin costs and the mild complexity of HRA’s, you can still save a lot of money on health premiums.
I think the real reason most brokers are not discussing HRA planning, is that it reduces their compensation. Brokers get paid a commission on every dollar that you send to the insurance company. There is little incentive for your broker to show you how to save money on your health insurance when it directly affects his or her income. With all the hype coming from Washington about the high cost of health care, your broker can sit back and say, “see, everyone has the same problem like you. There is really nothing we can do.”
Well, there is something you can do. We use HRA’s very successfully at our company to reduce our client’s health premiums. If you would like to learn how, or if you would like to see a real case study, request our free white paper today.