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2021 Open Enrollment Cost Strategies for Small Businesses

Open Enrollment

Health care has been an important issue, but in light of the pandemic, its significance is greater than ever. Here’s what you need to know this Open Enrollment season to stretch your business dollars and protect your team.

Rates Continue to Rise, But Less than Previous Years
Renewal rates for group health plans typically increase by 5% from one year to the next, but the good news is that right now rates are trending a bit lower, at 3% going into 2021. However, many small employer group rates have been inching up more slowly because many carriers continue to water down benefits to reduce the premium burden.

2021 Health Insurance Cost Strategies
The biggest concern for most employers is the cost. With rates high, here are a number of strategies you can take to reduce the overall cost burden on your company as well as your employees while still offering this important benefit.

Use In-Network Providers. 
Labs, such as Quest Diagnostics and LabCorp, that are considered in a PPO’s in-network roster will usually be cheaper. Plus, many of these labs will team up with the new grouped health programs like Canopy to offer better rates for lab exams.

Consider a High Deductible Health Plan (HDHP).
Another option for saving on premium is choosing an HDHP, which has a low up-front cost, but a high deductible (This can be as low as $2500 and as high as $7000) that must be met before the insurer starts paying a share of the costs. Be aware that if an employee knows they are going to have treatment in a given year, they may want to choose a lower deductible plan.

Opt For a Bronze Plan.
The ACA created a number of plans that are ranked by up-front cost and coverage in terms of metals (Bronze, Silver, Gold, Platinum). Bronze plans have the lowest premiums but also less coverage and more out-of-pocket costs for care. Note, most Bronze plans are considered HDHPs.

Implement Health Savings Accounts (HSAs).
Your staff can set money aside pre-tax in an HSA to help pay for out-of-pocket expenses. HSAs are basically tax shelters for medical costs and are good for healthy people who do not have many medical costs. They are also good for those who need to go to the doctor and can plan out those costs.

HSAs have special rules so be sure to check out the details. There are independent HSA administrators such as Lively  or check with your local bank for someone who can also act as an HSA administrator for your company or family.

Connect With Your Local Industry Association.
Many industry associations are non-profits and part of large groups, therefore they can often offer preferential group rates. VMA is the Northern California small business graphic arts association. This open enrollment season, contact shannon@visualmediaalliance.org to figure out the best ways to maximize health benefits for your company.

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