When employees are enrolled in High-Deductible Health Plans (HDHPs), improving medical benefits for employees becomes essential to reducing unexpected out-of-pocket expenses. Many small businesses want to keep premiums low while still supporting employees financially - and these strategies help do exactly that.​

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Acknowledging these limitations leads to a defined strategic goal: move beyond selecting the lowest premium (HDHP) and actively manage the employee’s financial exposure. 

The goal is to keep the lower premiums while reducing what employees actually pay - improving medical benefits for employees and overall healthcare affordability. The four steps below show how to improve health benefits for employees without rebuilding your plan from scratch.​

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Four practical moves for small businesses

 

1. Strategic HSA Funding for Maximum Tax Benefit

Health Savings Accounts (HSAs) offer a triple tax advantage:

(1) Contributions are tax-exempt

(2) Investment growth is tax-free

(3) Withdrawals for qualified medical expenses are tax-free

(Source: IRS Publication 969)

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This makes the HSA a powerful retirement savings tool that functions as a health benefit.

The direct financial benefit for the employer is savings on FICA tax (Social Security and Medicare). When the employer facilitates employee contributions through payroll deduction, both parties save on FICA tax (could be a combined saving of 15.3% on contributions). This tax saving represents a direct and measurable reduction in the SMB’s tax expenses (Source: Fidelity), positioning HSA funding as a crucial budget management strategy.

​2. Your Deductible Funding Model: A Cost-Controlled Solution for SMBs

Another way is to directly fund the high deductible is through Health Reimbursement Arrangements (HRAs). Employer contributions to these plans are tax-deductible, and reimbursements to employees are tax-free (Source: Porte Brown/IRS Rules). For SMBs (fewer than 50 full-time equivalent employees, FTEs), the key funding tool is the QSEHRA (Qualified Small Employer HRA). This plan allows the employer to provide direct funding.

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3. Not Just Funding the Bill - Actually Reducing It

Some benefits don’t just help employees pay medical bills - they help lower the bill itself.

 

Beyond traditional voluntary benefits like dental or vision, there’s a new class of technology-driven platforms designed to reduce employee out-of-pocket costs by actively lowering their medical expenses. Tools like: Tools like Octi and Goodbill​ give your team a real safety net: when a high medical bill arrives, the platform steps in to check for billing errors, apply financial assistance programs, and negotiate directly with providers. The outcome is simple - the employee ends up paying less.

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These solutions are purpose-built for small businesses. They’re incredibly easy to implement (usually just a quick setup and team invite), and they integrate with any existing health plan. No plan changes, no operational overhead.

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Most operate on a low monthly subscription paid by the employer - just a few dollars per employee - making them one of the most cost-effective ways to improve health benefits for small businesses and offer better medical benefits for employees. 

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4. Strengthening Employee Medical Benefits with Gap Coverage

Gap Coverage is a separate, supplementary insurance policy purchased to fill the specific financial holes left by the high deductible and copay requirements of the primary HDHP.

 

Products like Momentum GapCover and Kaelo Gap Cover are examples of this category. This is a dedicated insurance product paid by premium, not a funding account like an HRA.The plan works by paying a cash benefit directly to the employee when they incur a covered medical event, such as hospitalization, effectively capping their initial OOP exposure.

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Putting it together

You do not need a full plan overhaul. Some steps require more setup, while others are quick wins you can launch this month. Start with actions that lower near-term exposure, like gap coverage and a bill-reduction layer, then add HRA or HSA funding to stabilize the year. It’s a cost-effective way to enhance your small business employee benefits package while keeping premiums low and employee satisfaction high.