Group Health Insurance

Offering group health insurance as an employee benefit is a great way to attract top talent to you company, and to keep your employees healthy.  With the rising costs of health care, everyone is concerned about the types of benefits that a job will offer to them and their family.  To stay competitive as an attractive employer, you need to be able to offer a complete package of employee benefits, with health coverage being the foundation.

As any employer knows, the cost of providing health coverage to your employees has rising dramatically over the last 5 years.  It is becoming increasingly difficult to offer the same benefits that your employees are used to.  Most employers are being forced to find ways to reduce their costs in this area, and there are a lot of effective ways to do it. Lets discuss some of the ways that you can reduce the cost of your group health insurance, yet still remain competitive in the job market.

Hi-Low Option Plans

If you are an employer who has 25 or more employees participating in your plan, you should be able to offer a Hi-Low health plan.  This is where you have a choice of two plans that the employees can choose from. One has a higher deductible, and one has a lower one.  Many of your employees will opt for the higher deductible plan since the cost to them will be lower, and this will save you some money at the same time.  There are a lot of people who rarely go to the doctor and rarely get sick, yet they still want to have health insurance protection.  Many of these people will choose a less expensive plan with a higher deductible because they don’t feel like they need all the bells and whistles with their plan.  At the same time, you still are offering a more benefit rich plan to those employees who are willing to pay more to keep the kind of benefits they are used to having.

H.S.A. qualified or High-Deductible Health Plans

You probably already know about these, but they are health insurance plans that have a high deductible and they qualify to be used with a tax-free Health Savings Account.  With these plans, you deposit pre-tax money into a health savings account that can be used to cover the cost of your deductible each year.  When you use the insurance, you have to first meet your deductible before the insurance plan pays for anything.  Once the deductible is met, the high-deductible health plan (HDHP) starts paying according to your co-insurance agreement.  The best plans will pay 100% once you meet your deductible.  These types of group health insurance plans are less expensive than traditional plans, and can save your company a lot of money.

Some employers will also make deposits into the pre-tax health savings account for each employee.  This way they have some money there to meet some of their first out of pocket expenses.

Increase Your Plan Deductible, Offer Supplemental

While employees generally won’t like the idea of having a higher deductible, this strategy will save you money and keep your employees happy.  Your group health insurance premiums will go down by increasing your deductible on the plan.  Then, to help the employees cover the added risk, you can offer some supplement insurance that would cover the extra cost of the higher deductible.  You could either pay for all of this supplemental coverage, or part of it, or let the employees pay for all of it.

For example, you could increase your plan deductible by $1000 per person and then offer a voluntary supplemental benefit plan to cover $1000 of out-of-pocket, deductible expenses.  This can be something that employees can choose to sign up for if they want it.  This would pay a benefit in the event of an accident or a terminal illness.  These are the most likely scenarios where someone has to pay towards their deductible.  Most employees won’t ever go into their deductible, but when they do it is very expensive.  This can save you thousands of dollars per year, depending on how many covered employees you have.

Shop Around

If you been with your same group health insurance provider for a while, it’s very possible that you could save some money by shopping around to other companies.  Find a good independent broker who has relationships with many different companies, and let them do the shopping for you.  It is illegal for anyone to discount insurance premiums, so you will not pay any more or less by using a broker vs. going through the insurance company directly.  A good independent broker will be worth his weight in gold to you and your company.