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Fighting health care costs

Running a small business is hard enough, but rising health care costs have only made success more challenging. Here are a few potential ways to combat the expense.Succeeding in a small business in America can be a daily battle.The U.S. Department of Commerce has reported that out of every 10 small businesses that are created, only two remain after 10 years.1 And while a 20 percent survival rate can be scary enough to deal with, so can employee benefits costs, mainly, health care.Health care costs continue to skyrocket across the board. And while big companies and small businesses continue to struggle to keep costs low, it’s usually small businesses that get hit the hardest. Health care costs continue to rise, sometimes with double-digit increases every year.But that doesn’t mean there aren’t options available. Recently, more light has been shed on additional options to help small businesses save money and still offer health care.Several options exist to help small companies reduce costs. One of the most popular is encouraging employees to get individual health insurance. Instead of you, the employer, subsidizing a large percentage of it, the cost of health care is shifted to the employee. And on average, individual premiums are less expensive than those of group plans.And employers can help the employee out by giving a reimbursement to cover some of the costs or by helping the employee handle their Section 125 deduction. Either way, the small business owner can reduce costs a great deal using this method and oftentimes it can be a less expensive route than the one currently used.Another increasingly utilized option is to offer Section 105 plans to employees. Section 105 plans allow the employer to purchase a higher-deductible (but lower cost) insurance coverage for their employees. The high-deductible is offset through an employer-controlled, tax-advantage fund that pays claims to the employees for medical costs below the deductible. The result is savings for the employer and the employee.But not all companies will benefit from a Section 105. As with all plans, it’s important to consult with a financial professional to decide what type of health care savings can be achieved in your small business.Section 105s and encouraging the purchase of individual insurance are two ways to potentially save your small business money, at a time when small businesses are getting hit the hardest by health care costs. Making the tough decisions in all aspects of your business and studying all your health care options to reduce costs as much as possible may just be one of the things that keep you in the surviving 20 percent of small businesses.1 – Klein, K. The Bottom Line on Startup Failures. Business Week. (2002, Mar. 4)Colorado Comprehensive Wealth Management719-886-3377Registered Investment Advisory RepresentativeSecurities America Advisors Inc.Member NASD, SIPCFor more information, visit www.alexdonnell1.sarep.comColorado Comprehensive Wealth Management and Securities America Advisors Inc. are independent companies.

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