About 10 years ago, I sat across the table from my company’s insurance broker. I looked over the rate renewal sheet for our health insurance plan, leaned back in disbelief and put my hands on my head. I sighed. “This is the standard for insurance today,” he reassured me.
Our rates were going up again, and that’s after we had minimal claims the prior year. We thought we’d done everything possible to control our healthcare costs. It felt like no matter how well we managed them, we would never truly be able to reduce our health insurance costs. It was in this pivotal moment that I realized something so many business owners and entrepreneurs are experiencing today – health insurance is too damn expensive. And it was about to cost me more than I knew.
The cost of benefits affects your growth
As business owners, we know that employee benefits are important, and they’re also commonly seen as a cost that you need to budget for. Many don’t realize how much of an impact health benefits are having on your bottom line.
According to the Bureau of Labor Statistics, healthcare benefits account for $2.59 per hour, or roughly 8{cd266c1509fca34f59dc93da7daf12a6ee52c6401aabb2126e757d9de7c223fc} of total compensation on average. A 2016 study found that employers pay $6,435 per employee annually for health benefits. That’s a lot of money, which is a main reason only 53{cd266c1509fca34f59dc93da7daf12a6ee52c6401aabb2126e757d9de7c223fc} of small firms (a group that contains over 90{cd266c1509fca34f59dc93da7daf12a6ee52c6401aabb2126e757d9de7c223fc} of the United States’ businesses) offer health benefits to their employees. It’s too expensive, and it’s just unfair for many businesses to have to bear that burden.
Health insurance deserves the same scrutiny as any other contract you sign – you can shop for better rates, better fit, and better benefits. While renewing the same plan every year may be the easy route, it’s rarely the most affordable.
Being able to hire more people is an exciting and healthy sign for your business, but it also comes with additional costs. Remember, with every employee you add to your team, you also add the cost of their benefits. It can be hard to grow sustainably when too many resources are being consumed by your healthcare benefits.
Benefits and recruiting are connected
Now, more than ever, health benefits are a key deciding factor for job seekers. In fact, according to LendingTree, 40{cd266c1509fca34f59dc93da7daf12a6ee52c6401aabb2126e757d9de7c223fc} of the American workforce would take a pay cut for better benefits. Think about that for a second. What if you could hire more people because you could afford to pay less since you can offer superior benefits?
What if you could lower healthcare costs considerably, say by 20-50{cd266c1509fca34f59dc93da7daf12a6ee52c6401aabb2126e757d9de7c223fc}? Significantly reduced healthcare spend means more resources to invest into higher salaries and/or a larger team – allowing you to hire the best of the best. If you’re not currently offering benefits, you may be saving money by not paying premiums, but are you also potentially costing yourself the best talent for your business? It can be challenging to offer benefits for a smaller business, but now is an important time to change that. If your benefits are too expensive, or you don’t have the flexibility to offer a higher salary, or if you aren’t currently offering benefits, you’re probably not attracting the talent you need. These are stopping growth.
Others are leveraging benefits to grow
Melissa DiGianfilippo was a business owner with challenges attracting talent for her growing agency. Like many entrepreneurs, she was offering a plan to her team that was too expensive (her team felt the same way). In fact, only six employees were on the plan they offered prior to joining Redirect Health. Their brand was appealing, and they were attracting numerous clients, but their greatest challenge lay in attracting and retaining the best talent in the marketing industry. Healthcare offerings – or the lack of them – were at the root of the problem.
Her company started offering EverydayCARE, a healthcare plan from Redirect Health, to her staff two years ago. Today, she advertises free healthcare with every open position – something she never would have been able to do with her old insurance plan. Here is what she had to say about this new capability:
“Since joining Redirect Health and starting to offer EverydayCARE to my team, we have been able to attract more senior-level talent to our growing agency and have also been able to retain current employees for longer. Our agency has continued to grow year over year in revenue and profitability, and we definitely attribute that to our ability to hire and retain great people.”
Remove the barriers to growing your business 
Melissa’s story hit close to home for me. This is where we found ourselves when we made the decision to lay the groundwork for Redirect Health. Benefits were very important to our team and their families. We needed an affordable way to offer these benefits to our team.
That’s why we designed a healthcare plan that offers amazing value at a fraction of the cost by focusing on what people truly want from their healthcare plan. Remember that $2.59 per hour we talked about earlier? We found a way to offer it for as low as $0.61 per hour, and it provides unlimited preventive care and 24/7 phone visits.
Today, our healthcare costs are a fraction of what they were before we created this plan – so we can pay 100{cd266c1509fca34f59dc93da7daf12a6ee52c6401aabb2126e757d9de7c223fc} of our employee premiums and offer free healthcare to all employees and their families starting on day one of employment. The instant boost in recruitment we experience when we offer free healthcare is staggering. In a recent ad, we doubled our qualified candidates for the same position by simply adding ‘free healthcare.’ Simply put, recruiting is no longer a barrier for growing our business.
By saving so much on healthcare, you can put those resources into paying higher salaries, hiring more people, or investing it back into other growth strategies for your business. Don’t let unmanaged healthcare costs hinder your business from growing. Look at your healthcare benefits. If you could decrease your healthcare expenses by 20{cd266c1509fca34f59dc93da7daf12a6ee52c6401aabb2126e757d9de7c223fc}, what would you do with this money? Write it down. This is your 2018 healthcare strategy.
If you’re like me and like to build things from scratch, I’ve published a guide to create your own self-funded healthcare plan – download it now at redirecthealth.com/thoughtleader