Insurance is one of the biggest expenses that all businesses face, and those in the medical industry are no different. Insurance is also the one expense that can be controlled and even reduced by effective planning. I hope to give you a few pointers on what you can do to help you and your business deal with this expense.

You must always have copies of all of your policies readily accessible. In order to control anything having to deal with your insurance, you must first know what you are insuring and what you are not insuring. There may also be a time when you have a question about your coverage, and if you have your policy on-hand, you can answer your own question right way. Plus, you will be able to review your policy on your time.

Now that you have reviewed your insurance, you need to make sure this becomes an ongoing process. This should be done when you originally get the policy to make sure the policy is covering you and your business with no exposure, and that you are not paying for unneeded insurance. So many business owners/managers get a policy and assume everything is correct. No one knows a business better than the person who owns the business or the person who manages it daily. Please take the time in reviewing your policy to make sure it is correct. In doing so, you may notice a few things that have been overlooked. I have seen cases where a business was paying for insurance on several vehicles that it had not owned in years.

The same can be true for health insurance and workman’s comprehensive insurance. Employees are left on policies after they are no longer employed with the company, and the business is left with the bill.

Make sure your employees are classified correctly for your workman’s comprehensive insurance and general liability. Different jobs come with different classifications that have different premiums. For example, insuring an employee who is a medical technician at a doctor’s office will be classified as a bigger risk (higher premium) than an employee who answers the phone in the office.

As your business changes directions, so should your coverage. Some of your coverage may no longer be needed. For example, your day-to-day operations may change to where you begin to outsource something that was previously done in-house. This may allow you to eliminate certain coverages, which will most likely reduce cost.

A safety plan can and will eliminate certain hazards that can become claims. These claims will increase your premiums. A big part of this safety awareness should include safety on the job and how to perform tasks correctly to avoid injury to yourself or others.

You can also have training on what to do in certain types of emergency situations.
This type of training should be documented on all who attend to make sure all employees are included. This will help create awareness, but it must not stop there. Your employees must be reminded of this daily.

Many businesses create this daily awareness by posting how many days they have been without incident in a break room. If you choose, you can add a reward (i.e., a company lunch, a raffle or a safety award) at the end of a pre-determined time so your employees have a vested interest in the plan.

There has been a lot of talk about the cost of health care to businesses, and that includes those in the medical industry. In fact, business owners in the medical industry may even be paying more for health coverage for their employees.

Many businesses weigh the options on whether they should offer it to their employees. Health care insurance gives businesses an advantage in attracting new employees and retaining them. This advantage unfortunately comes at a cost. As a business owner/manager, you can reduce these costs in a few different ways to make it a win-win situation for both employee and employer.

First of all, I would recommend setting up your employee benefits on a cafeteria plan. The cafeteria plan will allow your employees to save money on their benefits on a pre-tax basis. Their compensation is reduced for purposes of calculating wages subject to Federal and FICA (Social Security & Medicare) taxes.

As for the employer, employee benefits purchased on a pre-tax basis reduce the employer wage base for purposes of calculating payroll taxes. Employers can realize direct bottom-line savings from the reduced employer FICA taxes, FUTA taxes and disability and workers’ compensation insurance premiums (these vary according to state).

As an employer, if you are offering health insurance as an employee benefit, you are required to pay at least 50 percent of this coverage. Some of your employees will only want very basic coverage, while others with more specific needs may want something better than just basic coverage.

In this type of situation, offer two plans: a basic and a buy-up. The basic will come with a higher deductible and basic coverage at a lower premium compared to the buy-up, which will come with a lower deductible and more coverage that will cost more than that of the base. The employer’s contribution can be based off the base plan.

For example, if the base plan costs $300 and the buy-up is $500, the employer only has to pay 50 percent of the base plan, which is $150. If the employee chooses the buy-up, the employer is still only responsible for that of the $150 – not 50 percent of the buy-up.

Something new to the market is consulting a doctor by phone. These new phone consultation options allow your employees to talk to a doctor by phone and call in prescriptions to a local pharmacy 24 hours a day, seven days a week. These consultations do not claim against your health care policy, and your employees don’t have to take time off from work to see a doctor. Plus, your employees avoid paying a co-pay. It’s a win-win for everyone.

These are just a few options I would recommend, and though this article spoke a lot about cutting costs, please remember not to cut to the point of exposing you and your business. In the end, you want to maximize your protection at the most competitive price.

For more information, contact John Barraza with American Capital by phone at 210-892-0673, or visit www.acbcins.com.