Controlling Health Insurance Costs for Employees, Employer

Health insurance costs have gone through the roof in recent years, especially since the Affordable Care Act has been signed into law. Many are looking for ways to control the costs.  Some are left empty handed.  You almost need an insider to give you the best tips.  However, many do not know where to look. In the meantime, they are forced to pay higher premiums and out-of-pocket costs.  Where does the bleeding stop?

The bleeding stops with the employer strategies. Employers need to have good expert consultant or advisor to make sure their moves are not only in the favor of themselves, the employer, but also the employees.  At times there is a disconnect from the employers to the employees because the employer is more concerned about their pocketbook.  Rightly so.  However, there just has to be a good mix between benefits and the cost for everyone.  

Employers should start off with finding a team of experts.  These are the specialist in the trenches everyday making things work. They may have published their own material on the subject, have a team of advisors and are willing to take the time with you.  

Employers should also offer multiple options for employees to choose from.  You may have high standards based on your current standard of living, but your employees do not.  There definitely has to be a low-cost, high deductible option as well as the rich, low deductible option.  Let the employee take control on their health care by starting out with making their own plan selection.  

Employers should also offer a series of voluntary benefits.  This does a few things.  

Retention of great talent is hard, but can be done.  This is one way to hook those key employees. 

Some employees just love little things such as dental and vision. So give it to them.  The good news, the employer does not have to pay for these benefits. They can to add value by contributing, but not required to do so.  This will increase employee production in the workplace.  

Offering voluntary benefits, such as dental and vision, will increase the enrollment percentages in the group health plan.  Some employers maybe opposed to this. However, in some situations, this can help lower the over all cost for some small to mid-sized employers.  This could be the key to making or breaking a benefits program.  

For smaller employers, 49 employees and fewer, have different strategies to work with since they are exempt from the employer mandate requirements.  Small employers have the option listed above to help control costs and provide value to their employees.  Since the market with 49 employees and fewer are on the community rating platform for premiums, the premiums will not necessarily decrease as a result of increasing the membership. 

Another option for smaller employers is dissolving the traditional group plans and allowing the employees to be guided with an insurance professional on the exchange/marketplace for options and the possibility of receiving a tax credit to reduce premiums. 

Employers will lose the pre-tax benefit of group health insurance by allowing employees to purchase their own health insurance. So we need to do the math to see which side has a greater advantage.

Employers also have to be careful when allowing their employees to purchase an individual plan.  Depending on how you do it, there could be some tax consequences to worry about.  

The best thing an employer needs to do is bring in their health insurance expert or consultant.  I encourage to at least bring in one other person in addition to your current benefits insurance agent/consultant.  This will allow you to see a couple different ideas as well as making sure your current consultant is acting in your best interests.  You would be surprised how many insurance agents get complacent in what they do and use their own interests for the strategies they use.  


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