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Small Business Employee Benefits and HR Blog

Health Insurance Horror Stories (and How to Prevent Them)

Health Insurance Horror Stories (and How to Prevent Them)It seems like everywhere you turn, people are complaining about health insurance. Many businesses are struggling with large-scale price increases, small companies can’t spare the time to manage their own healthcare reimbursement plans (HRPs), and remote employees find that they are unable to enroll in their company’s group health coverage.

It may feel like there is no way to solve all these problems, but we beg to differ. Check out these health insurance horror stories and the solution they all have in common.

1. Group Health Insurance Faces Double-Digit Increase

Megan was shocked when she found out her company’s group health insurance rates were going to increase by double digits in the new year. She is nervous that her employees will quit if she discontinues coverage, so she believes her only options are to shift more of the financial responsibility onto her employees or decrease the quality of coverage.

Lesson learned: Group health insurance often comes with a variable (and hefty) price tag, but switching to an HRP will provide more consistency in your expenses. In addition, your employees will be happy because they get to choose an individual health insurance policy that fits their family’s needs while receiving financial support from you, their employer.

2. Remote Employees Cannot Enroll in Group Health Coverage

Rob is a small-business owner who employs a few remote employees. Choosing a health plan that all his in-house employees would be comfortable with is a nightmare, but finding one that covers his remote employees is nearly impossible. He is worried that his remote workers will look for other employment if he cannot find a solution soon.

Lesson learned: Healthcare reimbursement is an easy solution in this scenario. Let employees choose the policy that meets their medical needs and fits within their budget. By providing an HRP, you are helping them cover the cost of their premiums through a formal tax-free benefit.

3. Small-Business Owner Has No Dedicated HR Manager

Stephen is a small-business owner with no dedicated HR staff (or budget, for that matter). He is planning to give his employees a slight pay increase in the new year to help them cover the cost of their individual health insurance policies. He wants to start offering real health benefits to make his business more attractive to potential hires, but doesn’t have the money or time to manage a benefits plan.

Lesson learned: Again, the best answer is a simple one. With healthcare reimbursement, you leave the hassle of benefits administration to software and you get to focus on your business. By offering this tax-free monetary benefit, you’re giving employees a solution that is better than cash.

Conclusion

Figuring out what health benefits to offer your employees can be a frustrating experience, especially for small businesses and those without a dedicated HR staff.

By choosing healthcare reimbursement (managed by benefits software), you are having someone else handle the complicated business of managing your HRP—which means that you are providing a meaningful benefit to your employees, and your time is freed up to manage your company.

The Comprehensive Guide to the Small Business HRA

What questions do you have about healthcare reimbursement? Let us know in the comments below.

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