Money Mistakes by Entrepreneurs
Far and away, the BIGGEST mistake small businesses make with their money is the way they spend it on health care. With few exceptions, you can drastically reduce your health care costs – and create equity with the unused premiums in the form of an H$A (health savings account) or an HRA (health reimbursement arrangement).
With an H$A, the equity accrues to the employees, and with an HRA, the equity typically accrues to the business owner. With an H$A or an HRA, monies that would otherwise go to an insurer are repositioned so that they are retained by either an employer or the employees (and – importantly – are not forked over to an insurance company).
The savings from this strategy can be between 10% and 60% (not a typo), and most businesses don’t understand these because the insurers and advisors make less money by suggesting this solution than they do with the more traditional – and overpriced – policies that are typically recommended…
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