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Thursday, August 7, 2014

Should employees foot more of the healthcare bill?

By Adam Groff

If you're a business owner, then you already know how expensive it is to cover health insurance costs for your employees. But, before you ask your hardworking staff to cover part of the expense, there's the right way, and wrong way, to go about popping the healthcare coverage question.

To help you better control insurance costs without losing employees, here are a few techniques when it comes to approaching your employees about insurance expenses:

Employee health insurance by the numbers

Employee insurance costs put financial strain on businesses both large and small. According to the Centers for Disease Control (CDC), roughly 45.2 million candidates that interviewed for jobs in 2013 where uninsured at the time of the interview. This leaves businesses in a tricky position, especially when more and more people expect health insurance along with their new job.

Likewise, the most recent Kaiser Permanente Family Foundation survey reports that insurance premiums for employers are rising 9% annually. With health insurance premiums likely to rise in 2015 as well, you may have no other option but to bargain with your employees over their coverage.

Employee compensation net of healthcare premiums

Give plenty of options

When approaching your employees about sharing the cost of their insurance plans, it's important to come to the table with plenty of options.

Any additional expenses you require your employees to pay probably won't go over easy, but viable healthcare options tend to help the situation. For starters, try offering your employees a shared health savings account. Health savings accounts are tax-exempt and will also save your business money as well as give your employees great tax breaks.

Another approach to take is to encourage your employees to find a cheaper insurance plan than the one you provide. If they do, sweeten the deal by covering a larger part of the cheaper plan's cost.

Cut insurance costs

If sharing the cost of health insurance with your employees is unavoidable, there are ways to reduce the overall cost for both parties.

Starting a wellness program at your business will help lower rates with your insurance provider while keeping your employees healthier in the long run. Tax credits are also available for businesses with 25 or fewer full-time employees. These credits can help your business save up to 50% on insurance premiums. You can then share those savings with your employees, which will help ease the insurance burden for everyone involved.

Just be honest

When it comes to approaching your employees with sharing the cost of healthcare, being upfront and honest is the best approach to take. Sure, your employees might still not like the idea of taking on the added expense, but at least they will understand and respect where you're coming from.

So, break down the costs you cover and show your employees the effect it has on the business's overall financial standing. By having a real understanding of the business's insurance expenses, your employees will be more likely to cooperate with sharing the costs.

If you need to share the cost of healthcare with your employees, keep in mind the pointers above and take the right approach. 

About the author: Adam Groff is a freelance writer and creator of content. He writes on a variety of topics including healthcare and business budgeting.