Small business owners face constant changes. Over the past year, many
may have dealt with the effects of the health care industry evolving,
the ups and downs of the economy, even employees’ circumstances
changing. Here are four health insurance trends that may help small
business leaders as they prepare for the year ahead.
1. Exchanges Take Center Stage for Simpler Benefits Administration
Health insurance exchanges are now part of the employee benefits
equation and for small businesses especially, these options can provide
numerous advantages. Privately run exchanges are gaining traction and are expected to surpass enrollment in the government exchanges.
These online private marketplaces have grown in popularity because
they can offer a mix of benefits products and help reduce an employer’s
time spent on administration and paperwork. And regardless of your size,
private exchanges can help your company offer a variety of benefits
Additionally, government exchanges can offer tax advantages for
certain small businesses — making them an increasingly common option.
2. Businesses Turn to Multiple Strategies to Control Health Care Costs
Controlling costs is always a top priority for small businesses. In
fact, 53 percent say it’s one of their top business objectives. So when
it comes to rising health care costs, it’s no surprise many are looking
to adopt cost-saving strategies whenever possible.
In 2014, 24 percent of small employers expected to increase
employees’ share of premiums, and 24 percent expected to increase
employees’ co-pays. However, shifting costs to employees can have an
adverse effect. Employees at small businesses say if their employers
shift an increasing portion of health insurance costs to them, then it
would have at least a moderate impact on their job satisfaction and
likelihood to consider looking for a new job. That’s why many employers
will be considering ways to save on health care costs while still
protecting their workforce.
For example, the defined contribution benefits model is gaining
consideration since it is a way for employers to control the amount they
pay towards benefits while still giving employees the ability to spend
on the health care options they feel are most important. A couple of
other health insurance trends to keep an eye on include high-deductible
health plans tied to health savings accounts and changes in spouse
3. Online Benefits Enrollment Continues to Grow in Popularity
There’s no substitute for the conversations an employee can have with
a benefits professional, but that doesn’t mean there aren’t benefits to
streamlining some of your administration processes.
From 2011 to 2014, employees using online enrollment methods at small
businesses increased by 62 percent. Other popular methods, including
paper and face-to-face enrollment, saw very little change for small
businesses during the same period. Most employees at small businesses
appear to be happy with the shift: more than 9 in 10 (93 percent) say
they’re at least somewhat satisfied with their current enrollment
Embracing technology for benefits enrollment can offer a more
convenient process for employees and help reduce time wasted on mistakes
with paper forms. Consider online options as a complement to your
already successful face-to-face communication methods.
4. Rising Out-of-Pocket Costs Drive Employees’ Need for Strong Financial Safety Nets
Employees are gaining new found benefits choices, but many aren’t
prepared to take on increasing out-of-pocket health care costs. According to
the Health Research Institute (HRI) at PricewaterhouseCoopers, the
average premium increase across all states in 2015 will be 6
percent. Yet, salary increases are only expected
to reach 3 percent. These pressures, coupled with the fact that a
majority of employees who work for small businesses (70 percent) at
least somewhat agree they wouldn’t be able to adjust to the large
financial costs associated with a serious injury or illness, prompt a
need for strong financial safety nets.
One way employers can help protect their employees is by adding
voluntary insurance benefits to their employee benefits packages. These
benefits help provide an extra layer of financial protection by paying
cash benefits directly to the policyholder if they get sick or injured
and are a way to offer a broader benefits package to your workforce.
Not to mention, employees who are offered and enrolled in voluntary
benefits are 37 percent more likely to say their current benefits
package meets their family’s needs extremely or very well than those who
aren’t offered voluntary benefits through their employer.
Is Your Business Prepared?
Every small business has its unique needs, but reviewing health
insurance trends for the coming year can help build a strong foundation
for the future. Consider best practices for these trends that can work
for your small business, and head into the future on the right foot.