California businesses today are in a challenging position. On one hand, the cost of offering health insurance to employees is soaring. Between 2002 and 2016, health insurance premiums for family coverage in California increased by 234 percent, according to the California Health Care Foundation, with an average annual premium in 2016 of $19,608.
On the other hand, California's current labor market is tight, with the unemployment rate lower than it's been in 15 years, according to the Bureau of Labor Statistics. So in order to recruit and retain quality employees, you need to offer an attractive employee benefit package.
Set your strategy to offset health care costs
How can you affordably offer employees the health insurance they want? The following six strategies can help.
Offer a high-deductible health plan (HDHP) with a health savings account (HSA).
On average, premiums are lower for high-deductible health plans than for other health insurance plans, and HSAs offer tax benefits for both employees and employers. An HDHP with an HSA helps make employees accountable for the cost of their health care. Because employees are paying for more of their own costs, they are more likely to spend the dollars wisely, compare costs for prescriptions and providers and avoid unnecessary doctor visits.Implement other tax-advantaged programs.
Flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) allow employees to use pretax dollars for qualified health expenses, as HSAs do. These programs are detailed in IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. With a premium offset plan (POP), employees can pay their health insurance premiums with pretax dollars.Purchase through Covered California for Small Business.
Small businesses may qualify for federal tax credits to help offset the cost of providing health insurance to employees by purchasing coverage through Covered California for Small Business. You decide the level of coverage and how much to contribute toward premiums. Businesses with 100 employees or fewer are eligible to purchase coverage through California's health insurance marketplace.Provide a wellness program.
A wellness program can promote health awareness among employees and encourage them to take better care of themselves. You might offer free gym memberships, healthy snacks in the break room, smoking cessation support, vaccination clinics or health screenings to catch health conditions early, when treatment is typically less costly. The Society for Human Resources Management offers a guide for establishing a wellness program.Offer a disease management program.
Chronic illnesses, such as diabetes and asthma, can be major contributors to health costs. Having a nurse work with employees to better manage and treat a chronic health condition can help minimize its effects and avoid complications. Some insurers offer this service, or you can find it offered through third-party providers.Use a nurse hotline.
Having a knowledgeable nurse to talk to can help health plan participants avoid unnecessary and expensive emergency room visits. Nurse hotline programs may be available through insurers or benefits administrators, or you can purchase them directly from providers.
A local bank can help
California Bank & Trust stands ready to help your business succeed not only with helpful financial tools and solutions, but also by helping you understand the challenges you face. We've helped California businesses grow and prosper for more than 60 years by combining the responsiveness of a local bank with the comprehensive services of a major financial institution.[cite::171::cite] [cite::172::cite]