Over the past 5 or 6 years healthcare premiums have been on
a steep rise. Now rumors are circling
that small business health premiums could double over the next few years with
the implementation of healthcare reform (Wall St. Journal March 2013). With that said it’s never been more important
to search out and begin to employ some cost management strategies. The old “set it and forget it” strategy in
regards to employee benefits strategies is or should be far gone. Here are some of my “go to’s”
Option 1: Changing Carriers
In today's healthcare markets all the big carriers may not be equal but pretty close. If your Dr’s and hospitals are in the network
and the benefits are equal, than changing carriers should always be an open option. This may save a business from passing along
costs to employees by raising deductibles or lowering company
contributions.
Option 2: Changing
Plans
Raising your deductible may not
always be the best solution, especially for a company with an older workforce, but
this has been a reality for most businesses over the past 5 years. Insurance carriers want to make insured’s act
more as consumers for their care, thus they are driving companies towards
higher deductible plans by pricing them out of lower or no deductible plans.
But before businesses raise them they should
look into some other options. Here are a
few; HSA’s are the fastest growing plan designs in the country and for good reason;
HMO’s just do not cover what they used to.
Dual plan options with a “high Plan” and a “low plan” and fixed dollar
contribution can help drive employees to less expensive plans by choice. Choosing the right plans could be imperative
in employee attraction and retaining so make sure you work with your broker and
fully explore all of your options.
***Option 3: HRA’s***
In 2012 I saved a small “not for
profit” school almost 30% of their total health costs simply by raising their deductible
and having the school pay the difference via a health reimbursement account(HRA). The employees were not impacted at all. Now saving 30% isn’t common but 8%-10%
is. If your group is over 10 employees
and your deductible is less than $2,000/Individual an HRA could be a great strategy.
Option 4:
Bridge/Gap Plans
A
gap plan is a plan insured by a third party carrier that can reimburse
employees a dollar amount for medical claims.
The employee just needs to submit a claim to the third party with proper
verification. These plans are typically
used in conjunction with raising the medical deductible and can be fairly
inexpensive. Bridge/Gap plans typically
come in voluntary as well as group platforms, but be careful…..these plans vary
greatly depending on the carrier.
*Option 5:
Pre-Taxing*
Its
2013 so if you do not have an updated section 125 plan I suggest you do so
ASAP. With that said with or without one
most businesses are pre-taxing health insurance either way. Here a few more ways to save money by
pre-taxing (saves businesses on FICA….7.65%).
·
HSA’s – Employees and employers can fund HSA
accounts by pre-taxing up to $6,450 per family in 2013. This saves the business $493 per employee per
year!
·
FSA’s – The 2013 limits have been reduced to
$2,500 per account for FSA’s but if an HSA is not an option FSA’s are not only
a great benefit but can also save a business money.
·
Voluntary Benefits – I get weird look every time
I tell someone that they can save money by adding more benefits….. but these
are 100% employee paid benefits that cost the business zero and each benefit that
can be pre-taxed saves the company money.
The healthcare world is like a constant changing maze, the
strategies of yesterday are gone today and todays will be gone tomorrow. For more help with navigating through all of
the changes today and hopefully saving some money while you move forward, give
Choice Benefits a call.
By:
Rick DeRosa
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