Employee Benefits: Practical Strategies for Small Business Owners

What’s the first thing that comes to mind when you hear the words health insurance?

If you’re like me, you probably cringe—because the comments that follow are rarely positive.

This is especially true for small business owners. Most want to offer competitive and comprehensive health insurance and employee benefits. But rising costs and shrinking coverage have left many frustrated, making it harder to attract and retain top talent.

We all know the world isn’t perfect, but offering great employee benefits at a reasonable price shouldn’t be this hard.

As someone who has worked with hundreds of small companies facing these exact challenges, I get it. Understanding the issues doesn’t necessarily make finding a solution any easier. The problems are complex, the challenges are real, and there’s no silver bullet (or superhero health insurance plan) that solves everything.

But here are a few practical strategies that can help:

1. Offer a High-Deductible Health Plan (HDHP) with an HSA

Yes, you’ve heard this before—and no, it doesn’t fix everything. But HDHPs paired with Health Savings Accounts (HSAs) allow employees to set aside money tax-free for future medical expenses. If they stay healthy, they can build up savings that would have otherwise gone to insurance premiums.

As an employer, you can be a hero by contributing to their HSA, helping them plan for the future while managing your costs.

2. Implement a Defined Contribution Model

Rather than covering a percentage of premiums, set a fixed dollar amount that employees can use toward their benefits. This creates predictability in your budget and encourages employees to choose cost-effective plans—often including HDHP options.

3. Promote Wellness and Preventive Care

Encourage annual checkups and routine preventive care. Offer time off for doctor visits and create wellness initiatives like step challenges or healthy eating programs. When employees prioritize their health, everyone benefits—from reduced claims to increased productivity.

4. Join a PEO (Professional Employer Organization)

PEOs group small businesses together to access better insurance rates and benefit options. You may not see the savings immediately, but over time, being part of a larger risk pool can reduce costs significantly.

PEOs also help with HR, compliance, and payroll—making them a valuable long-term partner. That said, no solution is perfect. If your group has high claims, costs will eventually catch up. So even within a PEO, it’s essential to have a long-term strategy to manage risk and cost.

5. Work with an Independent Benefits Advisor (that you trust)

The right advisor does more than sell you a policy—they become a strategic partner. A good advisor will benchmark your plan, recommend appropriate strategies, and help keep costs down while ensuring your benefits remain a valuable tool for employee engagement and retention.

The difficult truth is this: People get sick, and we all need access to quality health care. Our system isn’t perfect—some would say it’s broken. With double-digit premium increases year after year, it’s hard to argue otherwise. But it’s the system we have to work within for now.

If you’re looking for guidance on PEOs, employee benefits, or just need some honest advice, feel free to reach out:

steve@ocihr.com

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