Issue: Soaring health costs are forcing many small firms to shift more cost burden to employees or drop coverage.
Risk: The lack of health coverage can crush a small company's recruiting potential.
Action: Before dropping coverage, businesses should look into bare-bones "mini-med" health plans.
With health insurance premiums taking double-digit increases the past five years, many businesses (especially small ones) are facing a tough decision: Shift even more of the cost burden onto employees or drop health benefits altogether.
But be aware that many companies are taking a third option: offering a limited medical health insurance plan (or "mini med") that provides bare-bones health coverage. Extending that limited coverage will help you compete for hourly and part-time employees who don't have insurance.
Mini-med plans usually cover generic drugs and brand-name discounts. Hospital-stay reimbursements range up to $1,500 a day with a $25,000 annual cap (not nearly enough to cover catastrophic claims). Some plans limit the number of covered doctor/emergency room visits and they insure specific common illnesses. The policies typically lack coverage for mental health, physical therapy and chiropractic care.
Basic plans for single employees range from less than $30 a month to about $80.
About 10 insurers offer limited medical plans, including Aetna, Nationwide, UnitedHealth Group, Cigna, Humana and Pan-American Life Insurance.
Mini meds will become even more popular if Congress follows the presidential tax-reform panel's suggestion to limit tax breaks for employer-provided health insurance.
Advice: Approach an insurance broker who has experience with mini meds and handling plans for hourly or part-time employees. These plans have their own unique administrative requirements.