One of the largest expenses for most companies is employee medical benefits. The cost of healthcare insurance rises every year at a rate much larger that employees' salaries. This leaves many businesses in quite the conundrum each year--charge the employees more for their health benefits, pay a higher percentage of the costs as a company, or a combination thereof. No matter your company's situation, though, there is a solution to your employee medical insurance woes.

For small businesses, these choices can be even more difficult. If you don't have a large employee base among which you can allocate the medical risks, one or two employees with high medical needs can make your entire company's health benefit services extremely expensive. And even without these attributable higher costs, your ability to offer benefits at employee rates comparable to larger organizations can be virtually nonexistent. If you're a small business owner, it's important to review all the options available to you carefully.

When reviewing your employee medical benefit program, among the key points to consider are:

1. The goals of your employee health insurance program;

2. The size of your company;

3. The amount you can spend on group health insurance.

Action Steps
The best contacts and resources to help you get it done

Determine what goals you want to achieve through offering health benefits to your employees

It's important to set forth a series of HR-related goals that you want to reach through your medical benefits program. If you want to attract new employees, you need to make sure that your package is comparable or superior to your competitors'. If you want to retain your current talent, it's important that their medical benefit rates don't rise at a rate higher than their salary.

I recommend: eHealthInsurance.com offers your business the ability to search among several healthcare insurance companies to find the one that best fits your needs.

Right-size your employees' healthcare benefits relative to your company's size

It's a simple fact that a small business cannot achieve rates similar to large employers. This is because of the insurance industry's various actuarial charts--employers such as the federal government can offer their employees superior benefits at a low price. Instead, be realistic about the rates your company can expect to pay for the health benefit services your employees need.

I recommend: Assurant Health provides you with a choice among several employee medical benefits plans, including those that give your employees more choices in how their premiums are spent.

Be firm in the amount you can afford to spend on employee medical insurance

Unfortunately, it's a possibility that the rates your company can receive from healthcare benefits providers are higher than you can afford to spend. You can't bankrupt the company by spending more than you have to spend; if you know this amount going into discussions with the insurance agent, you'll be better able to discern if the plans being offered will work for your company.

I recommend: UnitedHealthcare and Aetna both offer benefit plans tailored to small businesses.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Consider looking into HSA medical benefit accounts to allow your employees more input into how their medical dollars are spent. In many cases, these accounts allow you to provide your employees with the coverage they need at a price you can afford.