by James Grimes
Employee medical benefits have steadily reduced profits for many employers, especially for small businesses. To offset rising costs, employers are making changes to their benefit plans which include increasing employee deductibles and out of pocket maximums. These changes have impacted the amount employees must pay up front for most covered medical care, prescriptions, as well as the total amount paid out of their pocket annually. For employer’s, this change made it possible to keep the premiums (the amount taken out of the employee’s paycheck or in some cases, paid by the employer, or shared cost employer/employee) as low as possible. These changes worked well for a few years because it shifted the impact of the increase to only those who actually utilized their medical benefits.
Today, deductibles and out of pocket maximums have grown to a point that they are considered “catastrophic”, and premiums for these plans have increased so dramatically some employers can no longer afford to provide these benefits, and some employees are opting-out altogether, in-lieu of large premiums being deducted from their paycheck.
How can employers protect profits and still offer employees a healthcare plan?
- Apply pressure—Utilize a professional to do your annual review and require they provide several options that fit your business needs. If you have more than 50 employees, you may have more negotiating strength than you think.
- Try SHOP Exchange—Small businesses with 50 or fewer “full-time equivalent employees” under the Affordable Care Act’s formula can use Small Business Health Options (SHOP) exchange to shop for small-business plans.
- Convert to Individual Plans—It is difficult to make this shift but, it may be in the best option for you and your employees to simply eliminate your plan and pay a stipend to each employee to put toward their own personal plan (if they choose to do so).
- Direct Primary Care— Companies are partnering with primary-care physicians or groups to provide primary medical care for a fixed-monthly cost. This is becoming more widely available in many communities.
- Health Care Sharing Ministries—Small to medium employers or individuals, can pay a monthly membership fee to participate in a cost sharing organization consisting of individuals with a common set of ethical or religious beliefs. You will need to check the organizations restrictions for membership.
- Phone a Dr.—A very inexpensive benefit that allows employees to contact a physician by phone to describe their illness or medical issue and be diagnosed without additional cost. If the Dr. determines that a prescription medication is necessary, she/he can arrange for that order be sent to your preferred pharmacy. There are several options available.
- Self-funding/Level Funded—Depending on the specific make-up and needs of you and your business, a self-funded or level funded plan may be an effective option.
James Grimes, President/Owner Autobody Advantage, LLC.
Chairman of Spring Hill Economic Development Commission-current
Chairman of Spring Hill Chamber of Commerce 2012
Board member for Spring Hill Chamber of Commerce 2009-2013
Board member Maury County Chamber and Economic Alliance 2010-current
Member of I-Car Advisory Board of Nashville-current
Senior Professional in Human Resources (SPHR)