These past few years, many small business employers have passed on the rising cost of health insurance to their employees by increasing deductibles and co-payments, and in some cases, smaller employers have dropped their health coverage all together. With the economic times changing, how does the future look for health care cost? Mercer, a human resources consulting firm, predicts that employee health care costs will rise 5.4% in 2012.
Health care costs continue to rise faster than inflation. The average cost of a family plan rose 3% from 2009 to 2010, but workers’ contributions to family health coverage jumped 14% as employers attempted to control costs, according to a report by the Kaiser Family Foundation.
With these staggering statistics, what can you do to control health insurance benefits cost and keep key employees happy with your benefits offerings?
Small business owners and their employees are finding a more helpful option to manage rising health care expenses. This option is voluntary insurance benefits. These benefits normally add no additional cost to the employer, and might reduce corporate taxes by cutting FICA tax contributions. In addition, the adding of voluntary benefits plans to a company’s benefits menu helps small businesses enhance their benefits choices while staying within budget or cost constraints.
What is Voluntary Insurance Benefits?
Voluntary insurance benefits can vary from dental, pet insurance, critical illness, supplemental health, accident or hospital indemnity, life insurance, vision and short-term disability. Some of these benefits, if not all, help employees manage out-of-pocket costs associated with serious accidents and illness costs that major medical insurance is not designed to cover. Recipients of these voluntary benefits plans receive cash benefits in the event of an accident or illness. The benefits can be used to help pay for daily living expenses, such as the mortgage payments, child care, groceries, rent and other medical expenses that may be acquired during the time the insured is out of work.
Traditional medical insurance plans do not cover every expense related to an illness, injury or death. The bills and expenses continue to add up, especially if you have stopped working and your income is lost. Voluntary insurance can help you prepare for these and other out-of-pocket expenses. Most of all, these plans help remove the worry of how you will pay your medical and other everyday living expenses.
With the rising, cost of health insurance many small businesses have to cut back on their major medical insurance coverage. With voluntary insurance benefits, employers can now offer a cost-effective supplement to their primary benefits that will be vital to their company and their employees.