As we all know, health insurance is expensive and getting more expensive every year. When I meet with business owners, they are all looking for new solutions to help them, and their workers.
The new strategy today is to have a benefits plan. A benefits plan helps employers keep their costs down, while keeping coverage high. Just doing health insurance alone, with lower deductibles ($500 - $1,500), is no longer an option for many employers.
A benefits plan starts with major medical health insurance. Keep the doctor's office visit co-pays affordable, such as $20. But, move the deductible up to around $2,500, $3,500 or more.
Then use a gap plan designed specifically to help offset the higher deductible. This plan provides the employee cash to help pay for the higher deductible.
Communication is very important. Select a carrier that has trained benefit counselors to communicate one-on-one with the employees your new benefits plan, how it works, and the value you have invested in them.
The carrier should also be well-versed in educating employees in their options for lowering their risks for out-of-pocket medical expenses or lost income based upon lifestyle, needs, and ability to pay.
Here is a typical example, involving a business with 14 employees. The renewal on their $1,000 deductible health insurance was going to be $411 a month per employee. By switching to a benefits plan, they ended up saving $45 a month per employee. Their benefits plan consisted of:
* Major medical insurance with a $2,500 deductible, $20 office visit co-pays, and a $10/$25/$40 prescription benefit.
* A gap filler plan to offset the deductible (it pays $1,500 benefit).
* No-cost services such as benefit communication and human resources tools.
* Employee education allowing employees to customize their own benefits plan.
The savings: $45 times 14 employees times 12 months equals $7,560 in annual savings, while keeping coverage high (or often better than before).
What could $7,560, straight to the bottom line, do for your business? Increase your marketing? Give raises to key employees? Equipment repair or replacement? Pay off debt?
The bottom line is this: There have been strategies available for the last few years that are being used quite successfully to lower the cost of your benefits, while keeping coverage high. When dealing with your health broker, make sure they are asking you good questions to understand all of your needs and challenges. There are many different solutions that save you both time, and money.
Warren Rund is district manager for Colonial Life in the Reno area. Contact him at Warren.rund@gmail.com.
