Tip #: Analyze The Risks And Costs Of Offering Health Benefits
Now that you know why offering health benefits is so important, your next step is to consider the risks and costs of the plans available.
Like any new expense you’d take on for your organization, investing time to research your available options is essential in finding a plan that meets your organization’s needs.
With The Largest Premium Increase In The Last 10 Years Federal Employees Should Consider Whether Their Existing Health Insurance Plan Is Still The Best Fit
Kevin Moss
Its open season for the Federal Employees Health Benefits Program, and participants have until December 12 to choose a health plan for 2023. The employee share of premiums will increase an average of 8.7% next year, the biggest jump in 10 years, which makes this year better than most for employees to consider switching FEHB plans.
Even if you dont want to make a switch, you should confirm your plan is still best for your familys needs. This Open Season checklist will guide you through the process.
Big Premium Increases
On average, the enrollee share of premiums will increase 8.7% in 2023, but this doesnt apply to every plan. Next year, premiums will decrease in 56 plans, stay the same in nine plans, increase below the average in 119 plans, and increase at or above the average in 78 plans.
Here are a few examples that show how widely the premium changes can vary: A Nevada plans premium is decreasing 36.5%, a plan in New Mexico is raising premiums 49.5%, and a plan in Illinois is raising premiums 34.2%, which will cost self-only enrollees an extra $6,510 for the year.
Its important to see how your FEHB plans premium changed. Even if youre satisfied with your existing coverage, there might be a better bargain available. While we dont recommend selecting an FEHB plan based on premium alone, its a for-sure expense that should factor into your decision.
Shopping for a New Plan
Flexible Spending Accounts
Plan Benefit Changes
Dental and Vision Care
Healthier More Productive Employees
When employees have group health insurance, they gain greater access to medical resources. The results often include:
- Reduced workplace absenteeism According to a study by the Journal of Occupational and Environmental Medicine, having health insurance any time throughout the year is significantly associated with a lower likelihood and reduced number of missed workdays.
- More productive workplaces Generally, healthy employees tend to work more effectively and efficiently than employees who are ill. A working paper about the manufacturing industry by researchers from the Center for Economic Studies provided evidence that health insurance may be positively associated with labor productivity.
- Reduced labor costs According to an article from the peer-reviewed healthcare journal Milbank Quarterly, another benefit to employers from having healthier workers may also be lower labor costs: unhealthy workers may retire or quit early, which could lead to expensive employee turnover.
Additionally, providing group health insurance may contribute to faster recovery time and return to work due to greater employee access to medical care and health resources.
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What Is A Group Mediclaim Insurance Policy
A group mediclaim insurance policy which is also known as a group health insurance plan is provided by employers to their employees covering a variety of benefits. To offer this policy, some employers deduct a certain amount from the CTC of the employees. The deducted amount is the premium cost of the employer-provided health plan. However, some organisations offer a group policy to their employees for free.
Group mediclaim insurance policy offers various benefits including security for an employee and their family members. This extended support is a jackpot and is of great benefit for working professionals.
Do I Really Need To Offer Employee Medical Insurance
We completely understand that not every business is quite ready to be offering employee benefits to their staff. Even if you are, you might be considering other forms of benefits that might be more attractive than simply a group health insurance plan. To help you understand the benefits of why health insurance is important, here are our top five reasons for choosing medical perks:
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Critical Illness & Personal Accident Insurance
Get discounted rates on Critical Illness and Personal Accident Insurance through MetLife.
- Critical Illness Insurance can help fill the gaps in your health or disability plan by paying a lump-sum benefit if you are diagnosed with a serious medical condition like a heart attack, cancer or stroke. It helps cover things like your deductible and coinsurance, transportation and lodging.
- Personal Accident Insurance can help protect against unexpected costs related to accidents by paying a specific dollar amount for covered events, including dislocations, burns, emergency room visits and more.
Are You Legally Required To Provide Health Insurance For Employees
If you have more than 50 full-time and part-time employees, you are legally required to provide group health insurance to your employees. If you fall into that bucket, you’ll need to make sure you offer coverage to at least 95% of your full-time employees and their dependents. Full-time employees are those who work more than 30 hours per week.
If you have less than 50 employees, you aren’t obligated to provide such benefits, but we’d highly encourage you to at least consider it. A strong benefits package can go a long way in terms of attracting and retaining talent, and the government also provides various incentives to help make this easier. If interested, we recommend SHOP, which we go into more detail on below.
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Voluntary Benefits And Financial Wellness
More than two-thirds of large employers say they revised their employee value proposition regarding wellbeing, and 52% have expanded voluntary benefits to address emerging wellbeing needs, according to Bucks 2022 Wellbeing and Voluntary Benefits Survey.
However, results showed employers place a higher value on physical health benefits, while employees place a higher value on financial wellbeing benefits.
Tom Kelly, principal in the national health practice at Buck, says he thinks the disconnect is probably due to employees lack of awareness and understanding of supplemental medical plans like critical illness, hospital indemnity or health accident. Most employees understand auto maintenance, auto insurance, travel discounts or even college savings they deal with them all the time , he says. However, when it comes to supplemental medical most employees arent as familiar. That is why how employers choose to communicate, enroll and educate employees is so critical.
According to Bucks survey report, supplemental life/AD& D, critical illness, health accident and hospital indemnity are on the top 10 list of voluntary benefits being offered by employers, with hospital indemnity the fastest growing voluntary benefit, at 20% year over year.
Where To Find Health Insurance Plans
First, we highly recommend assessing what benefits your employees are looking for. If a high percentage of your employees, for example, are looking for strong dental benefits, you’ll want a plan that emphasizes that. If your employees want cheap, minimal insurance that they’d only use for emergencies, that’s helpful to know as well.
Benenson Strategy Group reported that out of the 1,000 employees surveyed, most said that they’d opt for better health insurance rather than a 10% pay raise. In other words, it’s a big deal to employees.
After assessing their wants and needs, you can now enter the insurance market with a comprehensive list of the services you’d like covered and your budget, two of the most helpful initial filters.
Small Business Health Options Program
SHOP is a federal marketplace for small-business owners seeking health care plans. Each state maintains its own SHOP marketplace, but they’re all similar. In order to qualify to use SHOP, businesses must generally meet the following requirements:
- Have one to 50 employees
- Offer health care benefits to all employees who work over 30 hours a week
- 70% of your employees must enroll
- Have an office or employee in the state whose SHOP you’d like to use
Employers have the opportunity to select from three tiers of health insurance based on price and coverage. Once a tier is selected, employees can then go into SHOP on their own and can select their own individual plan based on the tier the employer selected.
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For Retirees Who Live In California
Please note that employees who retire but are not yet eligible for Medicare stay in their current medical plan until another qualifying event or Open Enrollment. Retirement is not a qualifying event that triggers a Period of Initial Eligibility. Get answers to your questions about Medicare.
During Open Enrollment, retirees not eligible for Medicare may enroll in any of the employee plans except UC Health Savings Plan. Individuals enrolled in the UC Health Savings Plan when they retire may continue in the plan as a retiree until they, or a covered family member, becomes entitled to Medicare.
Retirees enrolled in Medicare may choose from the following plans:
The Benefits Of Employee Health Insurance
But letâs be honest, insurance premiums are not cheap and â given the rise of insurance premiums in the last few years â employers are getting more and more anxious about just how much they have to cover. âIs it worth it?â you might be asking. Before you make up your mind, here are a few advantages to providing your employees with health insurance…
- ~Attract and retain top talent: Weâve already mentioned this earlier, but itâs worth mentioning again. Employees donât just look at the job description and the salary when deciding on their next job. The one thing that gives a company an advantage over another is the benefits that they provide. Donât just stop at health insurance, offer more paid vacation leaves or offer to pay for transportation costs , internet bills, cover the cost of a company laptop, etc. You can also offer perks such as a gym membership, food allowance, and more. Your generosity when it comes to your people has no limits, and the more enticing your benefits, the more edge you have over the rest of your competition. Another 2018 survey done by Americaâs Health Insurance Plan shows the following results:
- ~The average premium per-person through a small business plan was 7% lower than the average premium for an individual health insurance plan
- ~The average individual deductible for small business health plans was 31% lower than the average deductible for individual health insurance coverage
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Boost Employee Job Satisfaction
Another reason to offer small business health insurance is that it may play a significant role in helping maintain or increase employee job satisfaction.
According to a Glassdoor Economic Research survey, out of a list of 54 employee benefits, the following three basic employee benefits displayed the highest correlation with employee satisfaction:
Health insurance coverage topped the benefits that contribute to employee satisfaction.
Workers who are generally satisfied with their jobs often express this in positive business ways:
- More helpful, enthusiastic, and improved interactions with customers and clients.
- Greater likelihood of effective teamwork within a positive workplace environment.
- Inspiring employees to improve their skill set through further training and education.
Creating a work culture of engagement contributes to the business success and profitability.
Life And Accidental Death And Dismemberment Insurance
- Amazon currently provides two times your annual base salary for Basic Life and AD& D Insurance at no cost to you.
- You can buy supplemental life insurance coverage for yourself, payable to your designated beneficiaries if you die. You can buy coverage in amounts of 1x to 10x your base annual earnings, up to $2,000,000.
- You can buy life insurance to cover your spouse/domestic partner in amounts of $25,000 or ½ to 5x your base annual salary, up to $250,000 not to exceed 100% of your total amount of life insurance .
- You can buy life insurance to cover your children in certain amounts up to $20,000.
- An accelerated death benefit is available in certain situations involving a terminal illness.
- You can buy supplemental AD& D insurance to cover just yourself, or yourself and your eligible dependents, of 1x to 10x your basic annual earnings, up to $2,000,000.
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Us Supreme Court Spurns Challenge To Seattle’s Hotel Worker Insurance Mandate
-The U.S. Supreme Court on Monday turned away a challenge to a 2018 Seattle law requiring hotels to pay for health insurance for low-wage workers pursued by a business group that argued the measure violated a federal law that regulates employee benefits.
The justices declined to hear an appeal by a group called the ERISA Industry Committee of a lower court’s ruling that upheld the law. Their decision not to take up the challenge could encourage other cities and states to adopt similar requirements intended to address the widespread lack of health insurance among low-wage employees.
Democratic-governed Seattle’s law requires larger hotel operators to provide up to $1,375 a month in insurance benefits or direct payments to workers. Seattle, with a population of more than 700,000 people, is a city known for its liberal politics and is the largest in Washington state.
ERIC is a nonprofit organization based in the U.S. capital representing large employers in their capacity as sponsors of employee benefit plans for their nationwide workforces.
The group’s chief executive officer, Annette Guarisco Fildes, said the Supreme Court’s action allows a conflicting nationwide patchwork of employment laws to remain.
“The court’s failure to resolve this pressing legal issue now also opens the floodgates for states and cities across the country to impose similar ‘play-or-pay’ mandates on employers,” Fildes said in a statement.
How Much Does Health Insurance Usually Cost
The Kaiser Family Foundation found that on average, employers pay $5,700 per employee for single coverage plans and $14,000 per employee for family coverage plans per year. Insurance premiums have been outpacing inflation year over year, so you’ll also have to keep that mind if you’re planning on offering health insurance benefits for the long run. Also, the Bureau of Labor Statistics reports that health insurance benefits account for roughly 8% of employees’ total compensation across the U.S.
Employers aren’t required to pay 100% of the premiums for employees. In fact, only 27% of small firm workers are in a plan where their employer pays for the full monthly premium. According to the IRS, employers with more than 50 full-time employees must “offer affordable health coverage that provides a minimum level of coverage to their full-time employees and their dependents.” Minimal level of coverage is generally defined as 60% of health care costs for the standard population. You can also use the Employer Coverage Tool to determine if your plan meets requirements.
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What Do I Tell Employees Who Dont Think Health Coverage Is Important
An easy way to highlight how much of an advantage having employee medical insurance is is to tell people how much they might pay individually. For this, we have two really handy insurance industry reports available free:
- The Cost of International Health Insurance Report 2017 that shows the average cost of a range of international plans from 100 countries around the world and
- The International Private Medical Insurance Inflation 2018 report that tracks the rate of premium inflation across key international health insurance markets around the world
Paying for medical costs out-of-pocket is usually out of the question for most employees, at least without taking a massive hit to any savings they might have. Securing health insurance for your employees will be cheaper than if they purchased it themselves plus, as a group, youll have more control and negotiating power to ensure that the money you do spend on insurance is well spent.
Foster A Healthy Company Culture
Providing small business health insurance can show your employees that their health is important to you. By offering a group health plan as an employee benefit, you can demonstrate that you value your employees and view them as an asset to your organization. This appreciation, in turn, could help to promote a positive and healthy company culture.
The benefits of a positive work culture
Drawing from a variety of studies, a Harvard Business Review article provided evidence of how positive work cultures are more productive for businesses over time. The HBR article discussed the worthwhile outcomes which may come from having a virtuous organizational culture, including:
- Leading to an increase in positive emotion and well-being at companies.
- Improving peoples relationships and amplifying their abilities and creativity.
- Buffering against stress, helping employee resilience, and bolstering employee health.
- Enhancing employee loyalty while bringing out their best strengths.
- Contributing to higher levels of organizational effectiveness, including productivity, financial performance, customer satisfaction, and employee engagement.
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The Ease Simplicity And Value Of Ehealth
For all the right reasons, eHealth makes it easy to find group health insurance for your business. We let you quickly find and compare free small business health insurance quotes. Once you provide some information, including zip code and number of employees , you instantly get access to a great selection of group health plans offered by multiple insurance companies.
eHealth is committed to helping you achieve your health coverage goals as a small business. Once you find a plan that works for you, our licensed insurance agents can guide you toward the next steps for implementing and enrolling in a group health plan, all with no broker fees.
After enrolling in your new small business health insurance plan, eHealth will still be available to help answer your questions for the entire time you have your plan, at no additional cost to you. eHealth will also be your advocate when you need to resolve questions with the insurance company.
For all your small business health insurance needs, visit eHealth.com or speak with one of our expert health insurance brokers today.
This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.