Open enrollment for health insurance is here. From now until December 15, your employees (and you) have the opportunity to choose employee health insurance for 2020.
Of all benefits, employee health insurance is one of the most sought after. Medical benefits often top job seekers’ must-have lists, and employees who have medical coverage tend to be more likely to stay at their jobs.
According to a 2018 study conducted by Luntz Global Partners for American Health Insurance Plans (AHIP), 56 percent of respondents indicated that having employee health insurance had a positive impact on their staying at their current jobs.
When seeking employment, 46 percent of the study’s respondents said the presence of health insurance was a positive and deciding factor when they chose their current job. (The respondent pool was 1,000 U.S. adults receiving healthcare through their workplace.)
Employee Health Insurance Considered Vital
"If you are a U.S.-based business with 50 or more full-time employees, you are required to provide employee health insurance coverage," says Brian O'Connell, who covers healthcare issues for insuranceQuotes.
Many employers who provide employee health insurance feel doing so is critical to employee well-being.
"We believe it's important as an employer to provide health coverage that helps our employees stay healthy and productive, while also creating a community of wellness," says Natasha Scott, HR generalist at travel management app Lola.com.
"Providing great benefit and wellness options to our team helps them bring their strongest selves to work," continues Scott. "Along with covering core employee health insurance benefits, including dental, medical and vision, we offer services like on-site flu shots and dental exams."
"Providing health benefits to employees is one of the most impactful ways to strengthen your business," says Victoria Hodgkins, CEO of health benefits automation software company PeopleKeep.
"When you offer health benefits," Hodgkins continues, "your employees see that you're invested in their overall health and futures. Employees who feel valued make for valuable employees. You also improve your ability to attract and hire top candidates."
Employees with health insurance tend to have peace of mind, which is good for business, adds Vladimir Gendelman, founder and CEO of Company Folders. (True to its name, the company sells a variety of folders for business.) Gendelman provides employee health insurance to his workforce and considers it a necessity.
"If employees have to worry about getting medical attention or the cost of going to the doctor, such worry takes away from their quality of life," he says. "Additionally, if your employees aren't feeling good and don't go to the doctor, productivity goes down, and that costs your business money."
Challenges of Providing Employee Health Insurance
Shifts in the insurance industry in recent years have made the task of providing employees with health insurance increasingly challenging.
"In a highly competitive labor market, generous benefits packages continue to be a leading factor in attracting and maintaining talent. Unfortunately for business owners, group employee health insurance plan pricing just keeps going up," says Amy Skinner, content editor of Take Command Health and author of the Individual Coverage HRA Guide. The company helps companies set up tax-free employee health insurance reimbursement plans.
"For companies that don't have big, corporate benefits budgets to lean on, an employer-based group plan is often too expensive; too unpredictable, with costs continuing to rise each year; too one-size-fits-all; and too much of an administrative burden," says Skinner.
We offer a Qualified Small Employer HRA to our full-time employees so they can purchase plans on the individual market that work best for their families. These are an attractive alternative to expensive, cumbersome group plans.
—Amy Skinner, content editor, Take Command Health
"One of the biggest hurdles companies experience when it comes to providing health insurance is the cost itself. Premiums can be very expensive for employees and employers," says Shay Berman, founder and CEO of digital marketing agency Digital Resource.
Even though it's costly, Berman provides his employees with the opportunity to get private medical insurance. The company covers part of the cost of the medical insurance.
"With us helping to cover a portion of the employee health insurance costs, we've seen great participation from employees who would not have had opportunities to get insurance on their own due to cost limitations," says Berman.
Surgical Solutions, a healthcare solutions company, takes the same stance.
"One of the biggest obstacles to offering employee health insurance benefits is the constant rising costs," says the company's CEO Alyssa Rapp. "Year over year, our company has experienced a 7-percent increase for medical benefits. We are absorbing the lion's share of this increase for our employees."
Employee Medical Coverage Solutions
Rapp's company partners with a PEO (professional employer organization) for payroll and benefits coverage.
"By partnering with a PEO, we enjoy the benefits of their vast network, which drives down the cost of insurance," says Rapp. "There is a 'pooled' risk for our 200 team members across their 300,000 total employee base."
If your company has fewer than 50 employees and you can't financially swing offering medical coverage, a reimbursement plan may work well for your business.
"While that's good from a compliance standpoint," he continues, "it's really difficult to offer any employee health insurance. Group coverage is too expensive. We are better off reimbursing employees, who carry their own coverage."
Offering reimbursement to employees who carry their own coverage can be done through either a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) or the new Individual Coverage Health Reimbursement Arrangement (ICHRA).
"Both programs allow you to reimburse employees for their personal health insurance premiums up to set limits," says Cairns. "We use QSEHRA, but we're exploring switching to ICHRA."
If it's possible for your company to use a reimbursement plan as part of your employee health insurance offering, Skinner of Take Command Health suggests looking into doing so.
"We offer a Qualified Small Employer HRA to our full-time employees so they can purchase plans on the individual market that work best for their families. These are an attractive alternative to expensive, cumbersome group plans," says Skinner. "This new, tax-friendly reimbursement model brings flexibility, efficiency and cost-control to the employer and portability, personalization and more choices for the employees.
"In addition, ICHRA takes the burden of managing a health plan and underlying health risks off the employer," says Skinner. "There's no need to hassle with renewals, worry about participation rates, stress about what doctor networks your employees want or be surprised by annual premium increases."
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