Small businesses may not have access to affordable choices when it comes to employee benefits, according to Inc.
According to a recent study, smaller enterprises overpay for health insurance by about 29 percent. This may be in part due the the lack of affordable options available from health insurers, which may be prompting many businesses to change employee benefit providers on a consistent basis, the source reports.
The lack of quality plans available to small businesses is creating search friction – meaning many companies are unable to comparison shop due to a shortage of information – in the health insurance market which is fueling constant plan changes by small ventures. This trend in turn removes insurer incentive to invest in preventative care for its members, which can cause an increase in healthcare spending in the long run, according to the Incidental Economist.
"High turnover rates undermine the quality of health plans by reducing insurers' incentive to finance care that makes their policyholders healthier in the future," explained study author Randall Cebul, according to Inc.
As a result, benefits consultants should do due diligence when it comes to shopping for worksite benefits, the source suggests. It may be time consuming, but the extra work could save money and improve quality of care.
