Cutting the Cost of Your Employer's Health Insurance

Armen Hareyan's picture

Employee Health Insurance

Industry expert from offers five tips on how small businesses and employees can lower the cost of health insurance without sacrificing quality of benefits.

Company health insurance rates are up again, and small businesses are passing more of the cost of health insurance costs to employees and their dependents. What can small business owners do to avoid being Mr. Scrooge to their employee Bob Cratchetts?

Health Insurance industry expert Mike Chapman from offers five tips on how small businesses and employees with families can cut health insurance inflation without sacrificing quality of coverage.

  • Shop around for innovative benefits that save employees and employers on taxes and premiums. There are a number of innovative plans worth checking out this year.


  • Offer employees a choice of benefits at different premium rates. More employees elect coverage, which lowers rates, improves employee morale, and lessens absenteeism.

  • Learn the new lingo like HSAs (Health Savings Accounts) and HRAs (Health Reimbursement Arrangements) and even CDHPs (Consumer Directed Health Plans) that save on health insurance premiums and taxes.

  • Stick to the "meat and potatoes: benefits like health insurance and retirement plans, and cut out the "desserts" like dental, vision, or life insurance. These are easy to buy through an employer, but the employee pays a "convenience premium" to buy them this way vs. shopping around.

  • Compare the costs to insure a spouse or child in the company health plan vs. an individual plan. Most small businesses these days pass on the cost of insuring the employee's dependents to the employee, but employees can often purchase an individual plan for $200 to $300 less per person. This won't work if your employee is planning to have a baby, as most individual plans do not cover maternity, and individual plans won't cover pre-existing conditions.