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May 21, 2021
May 21, 2021
The cost of health coverage is the main drawback for many small employers who want to provide healthcare for employees. Still, there are ways to keep the costs down.
Below we look at typical costs of health insurance plans, as well as the paperwork and administration that come with the territory.
Before looking at some average figures for healthcare plan costs, keep in mind that many employers require employees to pay part of the monthly premium, often up to half (and sometimes more) of the premium total. When we mention figures below, be sure to pay attention to whether we’re discussing totals or just the employer’s contribution.
In 2012, the Department of Health and Human Services estimated the average annual healthcare premium cost was $5,359* for a single employee per year. (Nationwide figures can be found in this easy-to-read table.) Before you gasp for breath, keep the following in mind:
Sponsoring group medical coverage requires paperwork. While these tasks usually aren’t too burdensome, the time and money you’ll need to spend managing your plan is a cost that you need to weigh along with the cash costs.
Paperwork and employee relations management comes into play:
Keep in mind that brokers often provide many of these services. When working with a broker, be sure to discuss which administrative duties the broker will assume and which will remain your responsibility.
We discuss working with brokers in Part Two: Getting Covered.
If you’re ready to throw your hands up because you can’t afford insurance right now, don’t despair—you have some options. One is to consider some cost-saving strategies to find lower-cost plans.
In addition, there are some alternatives to group coverage that may make it possible for you to arrange for coverage for some of your employees and their families, at little or no expense to you. We introduce you to some of these alternatives later in Part One.
Do you have more questions about your health insurance costs? Agents are available.
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