As a small business owner, you want to take care of your employees, and in the benefits world that includes offering health insurance. You’ll know that people you care about have comprehensive coverage and offering insurance makes you an appealing employer in a competitive job market.
But trying to choose the right healthcare plan can yield surprising results. All small business employers need to ask themselves: Am I actually short-changing my employees by offering group health insurance?
Do No Harm
The problem is that if your group plan is not right for an individual employee, they don’t have great alternatives. There’s the option of choosing an individual plan on the government Marketplace, but if they turn down your group plan in favor of an individual one, in most cases, all possible subsidies disappear. The employee is stuck between two pricey plans.
So if you’re offering group coverage, you need to make sure it’s in your employees’ best interest. Here’s a list of what you need to think about to determine whether your group plan is really serving the needs of the people who move your business forward.
1) Does your plan pay enough for dependents?
Even if your plan offers dependents coverage, it may not be financially feasible for your employees. Some plans will help cover employee premiums, but will pay less or nothing at all for employees’ spouses or kids. The reason is simple: cost. Small businesses are often in no more a position to pay expensive premiums than their employees are. But if your average employee has a large family, they could be spending more than they can afford on medical care even with your plan.
2) Are your deductibles too high?
Again, for cost reasons, small businesses often go with high-deductible insurance plans that offer lower premiums. These plans are great if you have employees who don’t need regular medical care, or who only need basic checkups, which are covered even if you haven’t met your deductible yet. But employees who take lots of medications, need regular doctor visits to regulate ongoing health concerns, or have chronic conditions may pay a lot for their medical care before your plan is ever useful to them.
3) Who’s in network?
Does anyone in your company travel to get to work? If your plan offers a limited service area, chances are they’ll have to travel to get affordable health care as well. HMOs and PPOs only fully cover services provided by “in-network” healthcare professionals—providers who have contracted with the plan to offer lower rates. A network often has a limited geographic area. Your employees may come to you with established physicians whose services they’ll no longer be able to use.
4) Would your employees qualify for subsidies if they had individual health insurance?
This is the most important question yet. If you have employees with household incomes that would qualify them for subsidies on their individual health insurance, you may be preventing them from accessing those subsidies by offering group health. It’s a “greatest good” situation; if you have 2 employees who would qualify for subsidies and 30 who wouldn’t, then subsidies are less of a concern for you. But if a majority of your employees would be able to access tax breaks or out-of-pocket assistance for individual plans, you may want to free them up to take one of those plans.
I can help you do that. There are ways for your company to incentivize your employees to get individual healthcare, and compensate them for part of that cost, without providing group insurance. Your employees will get individual, tailored plans and could access savings.
Give me a call today so we can sit down and find out whether your group plan is helping or hurting your employees. Let me show you solutions that could help save you and your employees money.