Insurance is part of managing risk. Premiums are paid to insurance companies in exchange for some pre determined type of coverage. Premiums can be looked at as a certain small loss paid to avoid a potential huge loss. Premiums are also known as insurance rates. Coverage is available for a variety of reasons. Some types provide protection form loss due to some type of liability. Others are offered as a benefit to employees. Some is typically provided by an employer such as health and worker’s compensation. Health insurance coverage for the employees of a company is often offered at most moderate to large size businesses. Companies also often offer life insurance. There also mandates for some coverage such as worker’s compensation.

Insurance is a necessity in this day and age. Figuring out what is necessary is often a puzzle for business owners. Health, life, liability and worker’s compensation are all potential needs. The business itself and the employees need to be covered. In so many cases it is not a luxury. It is simply a must have. This becomes problematic when an employer must somehow budget for rising insurance rates. Year to year, this line item is eating up more and more of the budget as a whole.

Insurance rates have been on the rise for the past decade or so. In the past nine years, the employer’s contribution to group plan health insurance premiums have nearly doubled. Those rates continue to rise at a rate of 12 to 14 percent annually. Companies are struggling to pay these premiums for their employees and are striving to find ways to lower costs. One way employers do this is by going with plans that have high deductibles. This means that the employee’s out of pocket costs are higher. Companies sometimes offset these out of pocket expenses through flexible savings or health savings accounts for their personnel. These accounts are called health reimbursement accounts.

The rising cost of insurance, especially health insurance has become a major cost of doing business. It is a determining factor in a lot of businesses no longer in business. Employees need it and employers want to provide it. Employer provided coverage is the only option for many families. They could simply not afford to pay the price for private payer family coverage. However the continual rise in insurance rates is making it cost prohibitive for many small, midsize and even large companies.