It seems there’s a never-ending to-do list for small business owners, and insurance is squarely up there with the rest of the responsibilities. But a rapidly changing healthcare landscape has led to pricey insurance premium rate hikes that are putting extra costs and burdens on small businesses.
While self-insuring is a fairly common practice at large organizations, it’s more risky for smaller companies because of cash flow, internal man power and available claims data. However, for small employers looking for a way out from under the premium increases, self-insurance may be a viable option.
A small company can use a third-party administrator to extract data to understand the types of claims that drive costs. This information can help a company devise incentive structures that promote employee health and avoid costly claims.
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