Let's be real: group health insurance for employers isn't cheap. And if you're running a small or mid-sized business, every dollar counts. The frustrating part? Many business owners are overspending on their group health benefits without even realizing it.
The good news is that most of these costly mistakes are completely fixable. You just need to know what to look for.
We've helped countless employers find affordable group health insurance that actually works for their teams and their budgets. Along the way, we've spotted the same mistakes popping up again and again. Here are the seven biggest ones: and exactly how to fix them.
Mistake #1: Choosing a Plan Based on Price Alone
It's tempting. You see a plan with a low monthly premium and think, "That's the one." But here's the catch: the cheapest premium rarely equals the best deal.
Low-premium plans often come with limited provider networks, higher deductibles, and steep out-of-pocket costs for your employees. When your team can't afford to actually use their coverage, satisfaction tanks. And unhappy employees? They start looking elsewhere.
How to fix it: Look beyond the monthly premium. Evaluate the network size, coverage details, and cost-sharing structure. Calculate what your employees will actually pay when they need care: not just what hits your payroll each month. A slightly higher premium might save everyone money in the long run.
Mistake #2: Using a One-Size-Fits-All Plan
Your workforce isn't one-size-fits-all, so why would your health plan be?
Think about it. You've probably got employees in their twenties who rarely see a doctor, parents juggling pediatric visits and specialist appointments, and workers approaching Medicare age with chronic conditions to manage. A single plan can't possibly serve all these needs well.
When employees feel like their benefits don't fit their lives, they disengage. They underutilize the plan (which wastes money) or they leave for a company that offers better options.
How to fix it: Offer choice. Group health benefits for small business don't have to mean "one plan, take it or leave it." Consider offering two or three plan tiers: maybe an HDHP (High Deductible Health Plan) paired with an HSA for younger, healthier employees, and a richer PPO option for those who need more frequent care. Review your team's demographics, average age, and healthcare usage patterns to guide your decisions.
Mistake #3: Skipping Your Annual Health Plan Review
Here's a mistake we see all the time: employers set up their group health plan and then forget about it for years. Meanwhile, healthcare costs shift, plan options change, and employee needs evolve.
If you're not reviewing your benefits annually, you're almost certainly overpaying: or underdelivering.
How to fix it: Make plan review an annual ritual. Every year before renewal, dig into the numbers: What did you spend? How did employees use the plan? What feedback have you received? Are there new plan options on the market that might be a better fit?
This is where working with an independent broker (like us) really pays off. We can run comparisons across carriers and plan types so you're not stuck guessing.
Mistake #4: Not Understanding the True Cost of Coverage
Monthly premiums are just the tip of the iceberg. The true cost of group health insurance includes:
- Year-over-year premium increases
- Deductibles and out-of-pocket maximums
- Employer and employee contribution splits
- Add-ons like dental, vision, and life insurance
- Claims history impacts on future rates
Many employers underestimate these costs: and then get blindsided at renewal time when rates spike.
How to fix it: Calculate the complete cost picture. Ask your broker to break down all variable expenses and compare multiple plan structures, not just carriers. Sometimes switching from a traditional PPO to a level-funded plan can save thousands without sacrificing coverage quality.
Mistake #5: Ignoring Group Health Plans Requirements and Tax-Saving Strategies
Compliance isn't optional. Missing ACA reporting deadlines, fumbling COBRA notices, or failing to meet group health plans requirements can result in serious penalties: we're talking thousands of dollars per violation in some cases.
But here's the flip side: many small business owners also miss out on legitimate tax-saving strategies that could significantly reduce their benefits costs.
How to fix it: Stay on top of compliance deadlines, especially if you're classified as an Applicable Large Employer (ALE) under the ACA (generally 50+ full-time equivalent employees). And make sure you're taking advantage of tools like:
- Section 125 Cafeteria Plans – Allow employees to pay their share of premiums with pre-tax dollars, reducing payroll taxes for everyone.
- Health Savings Accounts (HSAs) – Pair these with HDHPs for triple tax advantages.
- Flexible Spending Accounts (FSAs) – Help employees set aside pre-tax money for medical expenses.
These aren't complicated to set up, but they do require some guidance. That's what we're here for.
Mistake #6: Communicating Poorly About Benefits
You could have the best group health plan in the world, but if your employees don't understand it, it's worthless.
We see this constantly: employees skim over enrollment materials, get overwhelmed by jargon, and end up picking the wrong plan for their situation. Or worse, they don't realize what's covered and skip care they actually need.
Poor communication leads to poor utilization: and that's money down the drain.
How to fix it: Invest time in benefits education. During open enrollment, hold meetings (virtual or in-person) to walk through plan options in plain English. Send reminder emails throughout the year highlighting key benefits, in-network providers, and preventive care options.
Consider creating a simple one-page summary of each plan option. When employees understand their benefits, they use them smarter: and appreciate them more.
Mistake #7: Overlooking Wellness Programs and Broker Expertise
Many group health plans include valuable extras that go completely unused: gym membership discounts, diabetes management programs, mental health resources, wellness incentives, and more. These programs can improve employee health outcomes and reduce long-term costs: but only if people know about them.
Additionally, many employers try to navigate the insurance market alone, relying on direct enrollment or online platforms. That's a mistake. The group health insurance market is regional, and pricing structures vary wildly depending on your location, industry, and group size.
How to fix it: First, make a list of all the wellness benefits included in your current plan and actively promote them to your team. Post reminders in break rooms, include them in newsletters, and mention them during team meetings.
Second, partner with a local broker who knows your market. At Total Benefit Solutions, we understand regional PPO networks, carrier competitiveness, and small group pricing structures specific to Pennsylvania, New Jersey, and beyond. We shop around so you don't have to.
The Bottom Line
Finding affordable group health insurance isn't about cutting corners: it's about being strategic. When you avoid these seven mistakes, you can offer competitive benefits that attract and retain great employees without blowing your budget.
Here's a quick recap:
- Don't choose based on price alone: look at total costs.
- Offer multiple plan options to fit diverse needs.
- Review your plan every single year.
- Understand ALL the costs, not just premiums.
- Stay compliant and leverage tax-saving strategies.
- Communicate benefits clearly and often.
- Use wellness programs and work with expert brokers.
Ready to Fix Your Group Health Insurance Strategy?
At Total Benefit Solutions, we help employers find the right coverage at the right price: without the headaches. Whether you're shopping for a new plan, looking to reduce costs, or just want a second opinion on what you've got, we're here to help.
Visit us at totalbenefits.net or give us a call at (215) 355-2121 to get started. Let's build a benefits package that works for your business and your people.
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