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Small Business Health Insurance Trends 2020

Changes in healthcare are prompting many small business owners to rethink the role of employee benefits like health insurance at their companies. According to PricewaterhouseCoopers, health insurance premiums are expected to rise by 6 percent in 2020, which can weigh heavily on your bottom line. Below, we explored some of the top health insurance trends that will impact small businesses and how you can adapt in the ever-changing benefits landscape.

 Small business health insurance is changing in 2019.

Small Business Health Insurance Trends

In order to stay competitive in an ever-tightening market, small business owners must develop savvy benefits strategies to attract and retain top talent. From trending workplace initiatives to increases to federal regulation changes, here’s how small business healthcare is changing in 2020.

Increase Deductibles

To combat rising premium costs, many small businesses are switching their insurance offerings to high deductible health plans (HDHPs). HDHPs can be paired with health savings accounts (HSAs), which allows employers to make tax-free contributions to their employees’ accounts and receive tax benefits. Additionally, the funds rollover every year, making them a great supplement for retirement savings accounts and an attractive employee benefit.  

According to the Society of Human Resource Management (SHRM), 56 percent of employers offer HSAs as a benefit—a percentage that is expected to see rapid growth in the coming years. According to Devenir, HSAs have risen 12 percent year-over-year, with assets growing by 20 percent annually. The investment advisory and consulting firm projects that by the end of 2021, the HSA market will approach $88 billion in assets held by more than 30 million accounts.

Prioritize Preventive Care

With rising health care premiums, unhealthy habits can further drive up small business healthcare expenses. As a result, preventive care will become a larger priority for small business owners in the coming years.

Already, the Centers for Disease Control and Prevention reports that almost half of U.S. businesses offer some type of wellness program. Moving beyond counting steps or logging water intake, initiatives like gym memberships, screening tests, and smoking cessation programs will be commonplace among small businesses in 2020. 

Benefits PDF

Offer Virtual Care

Seeing a doctor in person can be inconvenient and costly when you factor in scheduling issues and co-pay fees. Many small businesses have found telemedicine, also referred to as telehealth or virtual care, to be a good solution. According to the National Business Group on Health, 56 percent of the companies surveyed currently offer telemedicine services to employees. NBGH projects nearly all companies offering group health care plans will also provide telemedicine by 2020.

Telemedicine allows a patient to have a consultation with a medical provider via a computer, smart phone, or tablet. It’s an attractive benefit that allows patients to see a doctor around the clock, saving you and your employees time and money. In fact, insurance broker firm Willis Towers Watson found that employers could save up to $6 billion per year by providing telemedicine.

Utilize Benefits Technology

Small firms are increasingly looking to better utilize technology for help managing employee benefits. A Guardian Life Insurance study found that nearly half of all small businesses are more digital than paper-based—a percentage that will continue to grow as more business owners realize the low cost and high potential. 

Migrating benefits administration to a web-based portal offers a simpler and more efficient way for employers to manage their back office in one place. In addition to managing benefits, small businesses can look to digitize payroll, employee reviews, timekeeping, PTO requests, and company communication.

Improve Compliance

As a small business owner, you know your employees, business, and industry like the back of your hand, yet when it comes to federal regulations, you’re likely left scratching your head. After all, it can be challenging for small businesses to stay up to speed on regulations and the changes made to them each year. 

This past year was no exception, as we saw a few legal changes to health insurance. For businesses with at least 50 employees, business owners must offer the minimum essential health coverage that’s affordable or pay a penalty. In deciding whether to pay or play, keep in mind that penalties will increase by nearly 30 percent in 2020

Outsource Benefits

Managing healthcare is a timely chore for small business owners that takes them away from focusing on client relationships and workplace satisfaction. Perhaps that’s why so many small businesses have found that the best option is to outsource benefits management to a professional employer organization (PEO)

PEOs take on the responsibility of providing and managing things like health insurance, so employers can focus on growing their business. Not to mention, PEOs will also take on the regulatory liability of your employees, so small business owners can have better peace of mind. Working with a PEO also allows small business workers to gain access to big-business employee benefits like wellness programs and health, dental, life and other insurance offerings.

Get Small Business Health Insurance

With each passing year, healthcare will only become more complex. Small business owners will need greater support to navigate the changes and develop benefits strategies. 

Group Management Services (GMS) provides a Master Health Plan, offering small business owners the best healthcare benefits at lower premium costs. We leverage our buying power through mass policies, so small businesses can purchase multiple policies like health, vision, dental and other types of supplemental insurance coverage. Additionally, GMS provides payroll and tax, human resources, and risk management services to further meet your small business needs. 

Contact GMS today to talk with one of our experts about how your small business can offer quality health insurance at a lower cost.

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