How to Provide Affordable Health Care for Three Employees?

Fewer businesses are providing health care, especially small businesses. According to a 2011 report from the Robert Wood Foundation, only 38 percent of small business owners provide health insurance for their employees compared to 47 percent in 2000.

With the unknown costs of the Affordable Care Act looming, the problem could go from bad to worse – unless small business owners get creative.

Susan Combs, president of insurance brokerage Combs & Company, LLC., believes the best thing entrepreneurs can do is find a broker to shop around for them.

“Have a very candid conversation with them,” she says. If you (or an employee) have a child requiring regular medical attention, tell them.

Recently, Combs noticed a trend in companies with three to five people on payroll setting up Health Reimbursement Arrangements, or HRAs.

“You roll the dice but still save money …”

“It’s basically a promise to pay,” says Combs. “You roll the dice but still save money, because the likelihood of employees rolling through a deductible is so remote.”

With an HRA, employees can maintain benefits behind the scenes.

Employers can set up high deductible group plans and distribute the premium costs as they choose. Employees may or may not pay a portion of the deductible monthly and only pay copays for doctor visits. A portion of coverage is predetermined for emergencies.

“[HRAs] have been around for 10 years or so, they’ve just been underutilized.”

COMMENT: How do you handle insurance for your employees? Tell us!

BONUS PINK LINK: At nearly $100,000, are MBAs worth the cost?

By L. Nicole Williams

Nicole is the Editor at Little PINK Book. Follow her on Twitter @iamnicwill.

“Whatever you do, be different – that was the advice my mother gave me, and I can’t think of better advice for an entrepreneur” Anita Roddick

Image Shutterstock: ArtFamily