5 Ways to Spend Less and Give your Employees More
Here are five things that you should consider when evaluating the group medical insurance plans that you want to offer your employees:
- Realize that not all employees (EEs) need or want the same level of benefits so ask your EEs what they want – some want bare bones plans, others want comprehensive benefits. Try to match your EE’s needs with their desires. An employer can offer more than one plan to employees – so some can be on an HMO, others on a PPO; some on a low cost Bronze plan, others on a Silver, Gold or Platinum level plan.
- Sponsor a specific plan rather than contributing a fixed dollar amount towards employee medical insurance. By paying 80 or 100% of the employee only premium for a specific plan you help older employees who may be more experienced and valuable. The cost or monthly “premium” for older employees’ medical insurance is higher than younger workers because, by law, the premium increases for each age. A 35 year old costs more than a 34 year old. A fixed dollar Employer (ER) contribution such as $300 or $400/EE/month helps younger EEs because they can purchase better plans because the the monthly premium for their coverage is less. By sponsoring a specific plan and employer is able to allocate money more equitably and likely to the benefit of key employees.
- Consider Kaiser – it’s the least expensive option and some employees love it… others hate it. There is are 3 different ways an employer can purchase Kaiser coverage and each allows different parings of non-Kaiser plans.
- Consider Blue Shield’s new Accountable Care Organization (ACO) plan, called “Trio.” It’s very low priced and some well-known hospitals and doctors participate in the program. Blue Shield has been experimenting with Trio for a few years with very large employers (e.g., CalPERS) in the Sacramento area. Because of its success there; Blue Shield just expanded it to small employers.
- Consider offering a suite of “ancillary” benefits (i.e., dental, vision, life, short term and long term disability.) These are very inexpensive compared to the cost of medical insurance. EEs, really like the idea of working for an employer with a comprehensive benefits package. Depending on the number of employees in your company; you could offer all of these plans for around $100 – $125/EE/month.