Their 2017 premiums could see just minor adjustments upward, or could jump by double-digit figures and for many of the companies that operate on a small margin, it could be the breaking point. Finding workers to man positions in the small companies often depends on being able to provide health insurance.
Prescription Drug Costs
Factors that enter into the health care issue include in which state the business is located and how much its carrier paid in claims in the previous year. But pin the greatest cause of rising health care costs on increasing prescription prices. It’s an issue that has risen to the level of national concern among lawmakers.
Companies with 50 or more employees are required by law to provide employee health insurance. Many smaller businesses do it because they think it is the right thing to do and because it’s a perk that draws better qualified employees.
Health Care Managers
When carriers up their charges, the small business operators sometimes have to decide if they must scale back coverage or find other alternatives. Many companies hire a manager to deal with health care issues. The managers prefer companies that have self-funded plans. Such plans sidestep the 6.5 percent federal tax on premiums.
12% Rise In Cost
Self-funding has inbred risks, but with the costs of commercial coverage rising at the rate of some 12 percent per year, it is an option more employers are considering. Unexpected fluctuations keep the pot boiling. An unexpected drop of 11 percent in premiums had a small businessman in Las Vegas scratching his head, since nothing in his figures had drastically changed. He didn’t ask questions, but took the windfall and added vision coverage to the plan for his employees. Other business owners have simply had to dig deeper to provide the coverage for their workers.