Ways to reduce Health Insurance premiums and secure financial assistance for small businesses during COVID-19 crisis
During these unprecedented and extremely challenging times we wanted to offer some ways your small business can help reduce costs. We have some ideas to help reduce health insurance premiums as well as seek financial assistance through the new federal Paycheck Protection Program (PPP) during the COVID-19 pandemic. Whether you simply want ways to keep your current insurance carrier but lower what you pay in premiums each month, want to look at alternative carriers with less expensive plans, or find out how to apply for the PPP program, we have compiled a Q&A of some ways your small business can lower monthly health insurance premiums and benefit from the new federal Paycheck Protection Program.
How can I lower my health insurance premiums?
Whether you are a small business or have insurance in the individual marketplace, here are a few options to consider to lower your rates:
- Research other insurance company networks to see if your doctors participate with their network and then get quotes based on that network. Rates are often driven by network access, so rates for a large network plan tend to have higher premiums than that of a smaller sized network. As long as your doctors participate, you can easily save money going this route. Most licensed health insurance brokers can help you research options in your area.
- Look to increase your copays or deductible. Rates depend on how much ‘cost sharing’ you are willing to take on yourself. This means, if you increase the amount of your deductible or copays (take on more of the cost yourself) your premiums will be lower. The problem here is finding a good balance between saving money on premiums but keeping the potential out of pocket affordable. A good broker can help you compare the risk and rewards.
- Look at carriers that have smaller networks and maybe be willing to consider other providers than you might use now. A smaller network does not necessarily mean worse options. Most networks have robust options for primary and specialist providers to handle all health conditions. Unless you have a specific chronic condition or use services often, it might pay for you to consider a plan with thousands of providers with a network close to your home but lacking national reach. These plans work for most people and provide good access at home with coverage for emergencies anywhere in the US. Savings could be $100-$200 per month for an individual and upwards of $500 for a family by moving from a large national network plan to a local narrow network plan with benefits being fairly similar.
How can I find out how to save money on health insurance?
Call a licensed health insurance broker to assist you in finding and comparing plans in your area. In New York, Health Insurance Brokers do not cost anything to use, and premiums are the same if you use a broker or call the carrier directly. So you have nothing to lose by using a broker and accessing their knowledge and assistance. Brokers can assist you in finding and comparing plans and will continue to do that each and every year, even if you have to move from one carrier to the next during that time. They work for you and not the insurance company, so they should be a trusted resource in this area.
How can my business benefit from the Paycheck Protection Program?
As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Paycheck Protection Program (PPP) provides $349 billion of loan funds to support small businesses and other eligible entities impacted by COVID-19 to pay workers, interest on mortgage obligations, rent, insurance, paid sick or medical leave, utilities, and payroll related costs incurred from February 15, 2020 – June 30, 2020. You can learn how to apply and get additional details from our original blog post. You can also visit the NYSDC for updates and further guidance at https://esd.ny.gov/ as it becomes available. We are not accountants nor lawyers, and we are providing this information as a courtesy to you. You should consult with your own tax professional before making any decisions.
Can I lower health insurance premiums by joining an association or combining with other small businesses?
In general, small business health insurance plans are already rated based on multiple businesses being combined for insurance purposes. When a carrier offers say plan XYZ, many businesses will offer that plan to their employees. This has the same effect as having multiple employers join together to negotiate lower rates. In essence, the small business market is already made up of many businesses…tens of thousands of employees, all being combined as a ‘purchasing block’ used to come up with a rate for the overall enrollment in that plan. An association or a combination of multiple businesses has no better bargaining power than the tens of thousands of individual employees from multiple separate businesses. Both end up providing the same coverage to tens of thousands of people…and the rates are based on the same tens of thousands of enrolled people…regardless of if they are from an association, multiple businesses bargaining together, or from multiple separate businesses.
Should you wish to discuss plan options or get quotes, give us a call at 631-207-1800 or email us at info@peakinsuranceadvisors.com. We would be happy to answer your questions.