In a recent (and controversial) survey produced by McKinsey & Company, 30 percent of employers said they are likely to stop offering health plans in 2014 when the full impact of the healthcare reform law will take effect. Sixty percent said they would look for an alternative to employer-sponsored insurance. What’s going on here?
In 2010 the nearly 70 percent of firms that offered employee healthcare plans paid an average of $9,500 per family; slightly more than two-thirds of the $14,000 total premium. That’s a 114 percent increase over the average cost of healthcare in the year 2000.
When federal health insurance premium subsidies for lower-income uninsured employees begin in 2014, employees will be able to purchase coverage from health insurance exchanges.
As a result, some companies may opt to increase wages and have their employees get their own insurance from these new exchanges. Even with the $2,000 per employee penalty they’ll incur, they’ll still come out ahead, and they’ll eliminate their ever-increasing spiral of healthcare costs.
Ultimately, what employers do will depend on insurance costs in 2014 and the extent to which healthcare benefits impact their recruiting and retention. In case you’re out of the loop about how healthcare reform can and will impact your company, here’s a quick catch up.
Improved benefits are already available
Group policies issued since September of 2010 must include free preventive care screenings and they are not permitted to have lifetime limits in most situations.
If your current group plan doesn’t provide these benefits, you may be leaving benefits on the table because comparably priced plans that offer better coverage may be available.
Find out what your employees want/need
It’s illegal to ask questions about employee’s health in some states, but there’s no law against asking them what they want from their healthcare benefits. You may find that if you educate them on alternatives available through healthcare reform, they may be willing to make changes in their current plans, such as increased cost-sharing, high-deductible plans orHealth Savings Accounts. You might also find that they’re more interested in prescription drug plans than dental coverage.
One way to stay on the right side of privacy issue is to use an anonymous survey.
Wellness is the best healthcare approach
Small group health insurance policies cost less when you have a healthy group. Like safety, wellness comes from a company-wide attitude, not just a poster in the break room. Encourage exercise and stock the break room with healthy snacks.
One company employs a number of former Marines. Before work they get together for PT and then jog, singing cadence songs. “I’ve never been in better shape except when I was in the service,” one vet said. “Exercising with a group helps me keep from getting bored, and I push myself harder, too.” Sempre Fi!
Preventive care helps also. You may not have an HR department, but you can point people to websites that offer advice on preventive screenings and check-ups.
Shopping around for health insurance every couple of years may yield better coverage and lower costs.
But be careful, there are unscrupulous agents that try to take advantage of the confusion surrounding healthcare reform. Be sure you’re dealing with a licensed agent. It doesn’t cost anymore and they’re in the best position to make sure you get the right plan at the best price.
Tax credits are already available
If you have fewer than 25 employees and your average wages are $50,000 or less, you may qualify for tax credits in 2011 through 2013. You have to provide group health insurance and pay at least 50 percent of employee monthly premiums.
If you have fewer than 10 employees and average wages of $25,000 or less, you’ll qualify for the maximum tax credit of 35 percent of the premiums you pay.
Whether you have two employees or 250, you probably know that employer-sponsored health insurance is one of the benefits workers value most. Offering a group health insurance plan can help you hire and retain the best workers, as well as provide valuable protection for yourself and your family. That’s all going to be a lot more complicated as 2014 approaches, so stay in touch with what’s going on.
To learn more about healthcare reform and individual and family health insurance and keep up to date with changes, visit www.healthcare.gov.