Business owners are always looking for ways to add to their bottom line. If you haven’t looked at your benefits plans and service providers lately, now’s the time. You might discover that there are some easy ways to save. The following 6 options are no-brainers for any business.
6. Self-Insure Dental
Dental insurance is something that many companies offer as a group benefit. But you’re probably paying too much because you have a fully insured plan. Save yourself some cash—every year—and self-insure your dental plan—with the exact same benefits and design as your current dental plan. Since most dental plans pay out claims up to a cap of $1,000 per individual per year, your total liability is capped and well defined. Only a few of your employees will have major procedures (e.g. root canals or crowns) in any given year causing them to hit the $1,000 per individual per year cap. This means the rest of money that would normally go to the dental insurance company becomes savings that drop to your bottom line. So consider self-insuring your dental plan and look forward to saving money for years to come.
5. Self-Insure Short Term Disability (but Never Long Term Disability)
If you’re doing some financial planning, think about the disability coverage you offer. You can stop paying high premiums by opting to self-insure. Since short term is a designated length of time, you know your employee will either come back to work or move to long-term disability, so you know your liability because you can calculate how much you would spend per employee. And given that not every employee will max out this benefit each year, you’re still seeing savings. This doesn’t work for long-term disability, however, since the liability is not capped or well defined. In fact, an ex-employee could go on disability for decades. Leave that to the insurance companies who have large pools of insureds where the risk is widely dispersed.
4. Self-Insure Vision
As you continue your benefits review, think about self-insuring vision benefits as well. Much like dental and short-term disability, your vision liability is capped and well defined. Moving to a self-insurance option for vision can eliminate costly premiums and save you money, while still offering great benefits to your employees. Couple this move with self-insuring dental and short-term disability, and you’ll give your bottom line a nice boost!
3. Review Corporate Life Insurance Policies
It’s almost never a bad idea to review your corporate life insurance policies, since these policies have a tendency to kick around for a while. You’ll often be pleasantly surprised to know that your premiums can be a whole lot lower, and your coverage a whole lot better because you have taken on new partners or your company has outgrown these policies. When your life insurance was written several presidential administrations ago, maybe it’s time to take another look.
A word of caution: When doing a review, engage an outside broker. The broker who sold you the original policies might have a conflict of interest—and might try to dissuade you from moving to a better plan because it’s not in their best interests.
2. Get a Second or Third Opinion on Your Health Insurance Plan
Your health insurance plan is probably your biggest expense after salaries. So, annual increases of 5% to 10% will have an enormous impact on your company’s profits. Think you have no options? Think again.
Consider a high deductible health plan plus a health reimbursement arrangement (HRA) if you haven’t already; structured properly, this move can help you avoid high premiums and foster consumer-driven health care. Your employees will likely be more selective about what services they use and how much they use. Another option is to go self-funded, which, again, can help you realize huge savings, usually $1,000 per employee per year. If, after comparing different health plan designs, you conclude your current plan is still the best option, then you know you have a good broker and are getting good advice.
1. Request Proposals from Accounting and Law Firms
Have you been working with the same accounting or law firm for years or even decades? If so, it’s probably time to take a fresh look. Many business owners assume being a loyal client will get them service from professionals who understand your business. This is probably true. But a long relationship often breeds complacency—the firms often stop feeling that they need to work hard to keep your business. Another reason to take a fresh look is your business has changed over the years—it has grown or taken on additional products and services. Maybe the fit that was so good when your company was younger is not so good today.
Get a proposal from few different firms to see what the competition can offer. This could result in lower prices and will probably net you additional important high-value services. Again, if your current law or accounting firm still comes out on top, then you know you have a great partner.