Maximize Your Healthcare Dollar: Essential Factors When Selecting a Plan

As a small business owner in California or Arizona, providing quality healthcare for your employees can be a major expense, but it’s also one of the most important investments you’ll make in your team. With rising healthcare costs, it’s critical to maximize your healthcare budget and ensure your employees have access to essential care.

A article for example noted

“According to the 2022 Kaiser Family Foundation Employer Health Benefits Survey, premiums for individual coverage increased by 58 percent, from an average of $5,049 per year in 2010 to $7,911 in 2022. During the same period, premiums for family coverage increased by more than 63 percent, from $13,770 to $13,770. $22,463.”

These costs have since risen and continue to rise. Advice.com pointed out in July 2024 that,

“In 2025, commercial healthcare costs for the group market are expected to grow by 8%, which matches the 2023 estimate and is the highest expected increase since 2012. For the individual market, healthcare costs are expected to grow by 7.5%.”

In this quick guide, we’ll walk you through the essential factors to consider when selecting a healthcare plan for your employees, so you can make the most of your budget without sacrificing quality.

Assess your business needs

Before you dive into the world of health care plans, it is important to start with an internal assessment. Start by asking some critical questions:

• How many employees do you need coverage for?
• What are their healthcare needs based on age, health status and family size?
• Is your workforce concentrated in one area, or do you have employees spread across regions?

Small businesses in California and Arizona often face several challenges. For example, tech startups in California may have a younger workforce with an emphasis on preventive care, while agricultural businesses in Arizona may prioritize coverage for bodily injury and other work-related risks.

Understanding the needs of your employees will help you adjust your options. Some plans may offer better access to specialists, while others focus more on preventative care or emergency services.

Compare coverage options: HMO, PPO, and EPO plans

Care plans generally fall into place three main categories: Health Maintenance Organization (HMO), Preferred Provider Organization (PPO) and Exclusive Provider Organization (EPO). Each of these plans offers different levels of coverage, costs and flexibility.

• HMO plans: These are often the most affordable, but they limit your employees to a network of healthcare providers. Primary care physicians (PCPs) act as gatekeepers and referrals are required for specialists. HMOs are ideal for businesses looking to reduce costs while providing basic healthcare services, but they can be restrictive when it comes to choosing providers.
• PPO plans: These plans are more flexible, allowing employees to visit suppliers both within and outside the network. PPOs are ideal for companies where employees may need to see specialists more often or live in areas with limited health care options. However, this flexibility is usually accompanied by higher premiums.
• EPA plans: EPOs combine aspects of both healthcare organizations and PPOs. Like HMOs, they require employees to stay within a network, but like PPOs, they don’t require referrals to see specialists. These plans offer a good balance between cost and flexibility.

In both California and Arizona, regional differences may play a role in plan availability. It’s important to compare networks carefully, especially in rural areas where provider options may be more limited.

Factor in premiums vs. Out-of-Pocket Costs

When selecting a care planit’s critical to understand the relationship between premiums (the fixed monthly costs you pay) and out-of-pocket expenses (such as deductibles, co-pays, and coinsurance).

Simply put, health insurance premiums are the monthly cost of health insurance, while out-of-pocket costs are the amount you pay for health care services when you need them.

In general, lower premiums are associated with higher deductibles, and higher premiums are associated with lower deductibles. While it may be tempting to choose a plan with lower premiums to save money up front, these savings can disappear if employees face higher out-of-pocket expenses when accessing health care.

Plans with lower premiums often have higher deductibles, meaning employees must cover a greater portion of their health care costs before the insurance kicks in. On the other hand, plans with higher premiums may offer better coverage, lower deductibles, and fewer out-of-pocket costs. -pocket costs.

The key is to balance monthly premiums with potential health care use. If your employees are generally healthy and use minimal medical services, a high deductible plan with lower premiums may work. However, if you have employees with you chronic conditions or regular care needsit may be worth investing in a plan with lower out-of-pocket expenses.

Research networks and access to care

One of the most important factors when selecting health insurance is ensuring that your employees have access to a broad network of health care providers. This is especially critical in states like California and Arizona, where regional health care availability can vary significantly.

For example, workers in urban centers like Los Angeles or Phoenix may have access to a wide range of in-network providers, while workers in more rural areas may have fewer options. It’s important to check that the plan you choose includes providers that your employees can easily access.

Choosing a plan with a robust network not only ensures employees get the care they need, but can also help with retention. Employees who have access to their preferred doctors and specialists are likely to be more satisfied with their health care benefits.

Discover preventative and wellness benefits

Preventive care is an essential part of any health care plan. Not only does it help employees maintain their health, but it also saves companies money by reducing the need for expensive treatments later on.

Look for plans that offer comprehensive preventive services, such as:

• Annual physical measurements
• Vaccinations
• Screenings for conditions such as diabetes and high blood pressure
• Mental health care

Many plans also offer wellness programs that promote a healthy lifestyle, such as smoking cessation programs, weight management resources and fitness incentives. These services can reduce absenteeism and increase productivity, which is especially important in fast-paced industries such as technology or physically demanding jobs in construction or agriculture.

In both California and Arizona, there is growing support for preventive health care measures, and many plans reflect this by including wellness benefits at no additional cost.

Consider compliance with state and federal laws

Healthcare laws can vary from state to state, and it is essential to ensure that your plan complies with both federal and state regulations. For example, California operates Covered California, a state-specific healthcare marketplace that offers unique plan options and benefits not available in other states.

Likewise, Arizona has its own regulatory environment and business owners should understand the differences in requirements. All small businesses must also comply with the mandates of the Affordable Care Act (ACA), which requires companies with more than 50 employees to purchase health insurance that meets certain standards.

By working with a broker who is familiar with state-specific laws, you can ensure compliance and avoid expensive fines.

Take advantage of tax credits and incentives

Small business owners in California and Arizona may qualify for tax benefits through the Small Business Health Options Program (SHOP). These credits are available to companies that offer health care coverage to their employees and meet certain requirements, such as having fewer than 25 full-time employees and providing coverage that meets ACA standards.

In addition to tax credits, providing health care benefits can help reduce other expenses, such as employee turnover. Offering quality healthcare benefits is a valuable tool for attracting and retaining talent, which can ultimately reduce recruitment costs.

View the plan customization options

Finally, some insurers offer customizable plans that allow you to tailor coverage to your specific business needs. For example, you can offer basic coverage to entry-level workers and expanded options for executives or those in higher-risk positions.

This flexibility is especially useful for small business owners across industries. By customizing your plan, you can provide coverage that fits your budget while meeting the needs of your entire workforce.

Maximize your healthcare investment for long-term success

Selecting the right health care plan for your small business in California or Arizona doesn’t have to be overwhelming. By assessing your company’s needs, comparing coverage options, and taking advantage of tax credits and wellness programs, you can provide excellent health care benefits while staying within budget. Consulting with an experienced insurance broker can help you make informed decisions that support your employees and your bottom line.

JC Lewis Insurance Services: Simplifying Health Coverage for Small Business Owners

At JC Lewis Insurance Services, we offer California and Arizona health insurance from leading, recognized providers, ensuring you get top-notch coverage for your small business. With our extensive licenses and certifications, we are equipped to help you small employer groups finding the right solutions for health benefits.

We understand that managing employee health insurance can be a challenge, but our team is here to simplify the process. From initial installation to renewals and beyond, JC Lewis Insurance Services provides full support every step of the way, so you can focus on running your business.

We also provide guidance for seniors seeking additional Medicare and prescription drug benefits.

Whether you need help with Small Group Insurance (1-50 employees), navigating the Small Business Health Options Program (SHOP), or addressing other employer insurance issues, you can count on us for expert advice and personalized solutions .

Your well-being is our top priority and we are committed to helping you find the ideal coverage to meet your needs. So, contact us today and learn more about selecting the best plan for your business.