Is health insurance program important for your business?

Recently, there has been a lot of comments in the media on the increased cost of health insurance and the new terms and conditions that are being imposed by insurers to contain claim costs. Your question may be: in what way and how much will this affect your business?

Whatever may be the amount of premium increase the benefits you, as a business owner or employer, have in a health insurance program for your employees will generally outweigh the problems of not having any health insurance at all.

So, what are the major benefits of having a health insurance program:-

Ø  Budgeting and Cost: You will have a definite fixed annual cost for healthcare.  If healthcare is self-funded, there is a danger of costs being much higher than expected if there is a large claim (or increase in the number of claims).

Ø  Formalised Benefits: The benefits for each employee are clear and documented.  There is less potential for discussion over how much funding is available  and what should be paid for, hence less potential for employee relations problems.

Ø  Higher Benefits: The chances of a very large claim are slight, but it can happen. Can you afford to say to your employees that you will fund their healthcare up to very high limits (and then hope it does not happen because of the impact that have on your profits)? With health insurance, the risk of such large claims is spread and so made more affordable.

Ø  Administration Costs are Reduced: Your health insurance provider will take over much of the administration previously done by your HR / Finance function.

Ø  Improved Labour Relations: You do not have to become involved in the detailed negotiation of each claim.  If claims are not payable (for whatever reason), your health insurance provider will clearly explain the situation to the employee.

Ø  Lower Costs in the Long Run: Insurers can often negotiate lower costs with healthcare providers.  Also, detailed reports can pinpoint where healthcare costs are highest so that corrective action can be taken to ensure that costs (and hence premiums) do not escalate excessively.