Why Target Health Insurance Is the Perfect Solution for Small Businesses
Small businesses face multiple challenges, and one of them is managing employee healthcare. Providing health insurance can be an expensive proposition, especially for companies with a limited budget. However, not providing this benefit can make it hard to attract and retain top talent. Moreover, with the ongoing pandemic, there is a growing need for businesses to prioritize employee health and wellbeing. This is where target health insurance comes in.
What is Target Health Insurance?
Target health insurance is also known as level-funded insurance. It is a hybrid solution that offers the benefits of self-funded and fully-insured plans. With target health insurance, small businesses can enjoy the financial savings and flexibility of self-funded plans while also enjoying the protection and predictability of several fully-insured plans.
The Advantages of Target Health Insurance for Small Businesses
Target health insurance offers several advantages for small businesses:
Customization
One of the most significant advantages of target health insurance is its ability to be customized to meet the unique needs of a small business. Companies can choose from a range of deductibles, co-pays, and coverage options, tailor-fit the plan based on what they and their employees need. This feature ensures that small businesses get the right health insurance coverage for their resources.
Cost Savings
Target health insurance is an affordable health care solution for small businesses. With level-funded insurance, the company pays monthly premiums like a fully-insured plan. However, the employer is refunded any unused premiums at the end of the year, unlike the traditional plan. The cost savings can be substantial, making level-funded insurance the preferred choice for many small businesses.
Greater Control
Another advantage of target health insurance is the flexibility and control it provides for both the employer and employee. The customizable nature of these plans, which we touched on earlier, allows small businesses to manage health care costs and provide employees with the medical benefits they need. Also, unlike fully-insured plans, the employer is responsible for managing claims and can track how their plan is performing in real-time.
Reduced Risk
Small businesses that choose target health insurance often bear less risk than under traditional plans. This is because businesses can set aside funds in case of claims, but these funds are only used when necessary. This risk reduction allows for better financial planning and budgeting, alleviating worries about unexpected costs and ensuring the most optimal use of funds.
Case Studies: Target Health Insurance and Small Businesses
To illustrate the benefits of target health insurance for small businesses, let us examine a couple of real-world examples:
Example 1 – Powell Gardens Inc.
Powell Gardens Inc., a nonprofit organization in Kingsville, Missouri, provides high-quality educational programs and horticultural services to members and visitors in the community. Before opting for target health insurance, it had found its fully-insured coverage became too expensive, and the nonprofit saw the need to manage its expenses better.
After adopting target health insurance, Powell Gardens was able to develop a customized health insurance plan that fit its specific needs, providing cost-savings and the flexibility required for the company. The level-funded insurance plan also provided for immediate savings that could be invested back into the organization to secure its future.
Example 2 – Livestock Water Recycling, Inc.
Livestock Water Recycling, Inc., a technology company, was looking for a way to manage the costs of employee healthcare. Level-funded coverage enabled them to secure an affordable healthcare solution that worked well for the company. Since the business had a younger workforce, management chose to implement a high-deductible plan with a health savings account.
As a result, Livestock Water Recycling, Inc. was able to save $100,000 in the first year on healthcare costs while offering employees the benefits they desired.
Conclusion
Target health insurance is a hybrid cost-effective healthcare solution that offers the advantages of self-funded plans and the protection provided by fully-insured plans. With target health insurance, small businesses can customize their health insurance plans according to their unique needs, and enjoy the benefit of cost savings, control, and the ability to manage risks. By choosing target health insurance, small businesses can offer their employees high-quality and affordable healthcare.
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