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August 2021   Volume 19, Number 8        

Why Do Health Care Premiums Increase?

Is there anything you can do about it?

A good step toward getting your group health care insurance costs under control is to understand why your premiums increase. While inflation plays a big part, there are other important factors:

  • New technology and specialized medications save lives, but have a hefty price tag
  • People are living longer, which increases the number of illnesses they have to treat
  • Common chronic conditions often require long-term medical attention, including office visits, prescriptions, outpatient treatments or emergency care
  • The number of covered lives
  • The insurer’s administrative costs.

How to Reduce Costs

Even before you get to your annual health insurance enrollment, there are things you can do to help lower health care costs:

  • The more employees you hire, the lower your health care costs. Insurers are willing to offer lower premiums if there are a lot of employee premiums to cover the risk of a high medical bill.
  • If you have fewer than 10 employees, you can increase your buying power by joining a health insurance group with other firms provided they are in the same state.

If the annual renewal period is imminent, consider these actions to lower costs:

  • Offer preventative wellness plans. These plans often provide free medical services including low-cost flu shots, cancer screenings, non-smoking seminars, and mental health phone counselors — all can improve employees’ health.
  • Reduce your coverage costs by not offering dental or vision coverage
  • Choose a high-deductible health plan (HDHP). These plans have low premiums, but employees must cover more of the costs. If you supplement it with a health savings account (HSA), employees can save for medical expenses with tax-exempt dollars.
  • Choose a plan that has a high maximum out-of-pocket requirement and low premium. The employee will have to cover more of the medical costs.
  • Compare insurance providers to find the best costs.

Please call us if you would like to explore some of these options further.

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In this issue:

Cryptocurrency: A New 401(k) Option

How to Help Employees Set Up an Emergency Cash Reserve

Best Practices for Administering Intermittent FMLA Leave

Are You Responsible for Employee Identity Theft?

Why Do Health Care Premiums Increase?



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