Health Care Solutions for the Small Business Owner

By Alden Smith

Owning a small business and providing health coverage for your employees can be a daunting task. With the high cost of health care, a business could easily be destroyed if care is not taken in searching for and investing in the proper health care plan.

According to the U.S. Chamber of Congress, over 45 million Americans are uninsured, with almost 60 percent of those employed by small businesses. The reason for this is simple: Small businesses simply cannot afford health care for their employees. Couple this with complicated regulations, and a lack of bargaining power with insurance companies, and it is plain that small businesses in America face a frightening challenge.

President George W. Bush has made the enactment of Small Business Health Plans (SBHPs) a focus for his second term health care agenda. This legislation has remained stalled in the United States Senate for over a decade. Then in November of 2005, Senator Mike Enzi of Wyoming introduced legislation through Act S. 1955 to address the concerns of the Small Business Health Plan opponents. The bill was passed by the Senate, and this critical piece of legislation was brought to the Senate floor for debate in May of this year. It did not garner enough votes to stop a filibuster, and it is uncertain whether or not the Senate will reconsider the bill again this year. The business community, however, has high hopes for this legislation, and will be pushing for passage.

So as a small business owner, what can you do to solve your insurance needs at a cost you can afford? Although options may seem limited, there are ways to help you get the best bargain for your health care dollar.

1. Purchase high-deductible insurance plans at a very real savings, and encourage employees to open a health savings account to pay for non-catastrophic health care needs, such as routine exams, annual checkups, and routine lab work. Typically, employers contribute 80 percent of the premium for health coverage, so you may want to consider changing to a 70/30 split, saving your business considerable cash outlay.

2. Switch to a "mini-med" insurance program. Generically speaking, a mini-med program is a type of indemnity insurance plan which offers limited health care coverage, and will pay a fixed amount for medical expenses. Small business employees will have an option to purchase a $5,000, $10,000, or $15,000 plan that allows them coverage through their own choice of how monies are to be spent. The mini-med program often comes with prescription drug coverage.

3. Look at the way you handle prescription coverage. By adding a deductible of $250 to $500 to your plan, the savings will be significant. Use a prescription discount card for your employees to your best advantage. Encourage employees to use only generic drugs - the costs savings is very good, and the generic drugs are exactly the same thing as high priced brand names drugs.

4. Limit your insurance offering to families of three or more. Consider adjusting the company contributed amount towards the premium for employee family members.

The name of the game in small business employee health coverage is to be creative, and to examine all the options, so that there is a "win-win" situation for both employer and employee. Health care coverage in the United States is high in dollar cost, no matter if you are a small business or a large corporation. Using every option available is to your advantage, and may mean the difference between success and failure in your business. Much information is available online, and a few hours spent pursuing different options is to your benefit.

Alden Smith is an award winning author and regular contributor to DoItYourself.com. He writes on a variety of subjects, and excels in research.

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