Employees and employers are at a crossroads between health insurance benefits and cost. For years employees have been spoiled and at a time of dire straights, employers are cutting back on everything. This is not sitting well with employees because now it has become an entitlement to them. Those employees are in for a reality check. However, they should not lose faith with their employer just yet. There is a win-win situation for their health insurance.
Employers need to start thinking outside of the box. No more tucking the employer’s tail between their legs. Take Charge! Fire the current insurance agent if you have to. You need a better solution. A solution that will cut costs. Maybe with the right situation, you can increase the coverage at the same time.
Now, let’s not get too excited. Every situation will be different, thus, results will be different. By changing old school thinking, you can cut as much as twenty-five percent. In some cases, the little guy, 1-10 employees, can save 50% or more. The bigger groups could save equally as much, however, there are too many variables to say what the savings can be. You have to consult with an insurance advisor who is an expert and thinks outside of the box.
Often, businesses can just force their current insurance agent to actually do their job and compare insurance plans for the group. I’m not saying the agent should put together the quotes from two or three carriers and email them to the employer to say “What do you think, Boss”. Some employers are analytical and need this approach. If the employer requests it that way, that’s fine. Have it sent. Otherwise, it is just an easy way for the insurance agent to cop-out. The insurance agent should be reviewing the top two or three carriers, and their plans, for their particular situation and then make two recommendations on their expertise. After all, the insurance agent is the expert. This process alone can save 25% with the same or similar coverage.
The next thing to consider is breaking traditional habits and do away with the group health insurance all together. Then have an employer set up a reimbursement schedule through whats called a Health Reimbursement Arrangement, otherwise known as HRA. This is part of the tax code that allows reimbursement for medical expenses, including health insurance. It is similar to a Flexible Spending Account (FSA) but there are differences.
With the HRA, the employees can go out and choose their own plan. Typically the insurance agent that recommended this change will take care of the details for the employer. For those with pre-existing conditions, there are solutions for you. This is if you work with the right insurance agent. The reimbursement by the employer can meet or exceed the employees cost of insurance. Employers can short change the employees, but that won’t go over well with the employees. Especially if they find out the employer saved as much as 60% in the mean time.
By making some or all of these changes, maybe the employer can weather this turbulent economy and retain their hard-working employees and the health insurance for them. Some of the employees may even produce more because they are happier about the situation. At the end of the day, the employees go home in a better mood and the business becomes more profitable.
Butch Zemar
www.EliteBenefits.net