Employee contributions for health insurance - moving from an 80/20 to a flat dollar amount

jbduffy

Due to constant increasing health insurance costs, after 30 years we are reviewing our current plan design for how we contribute to the costs for our EE health care coverage. For 30 years we have been covering 80% of premiums for all family sizes. We are considering a flat dollar amount per EE so that we can begin to control costs and shift the constant annual increases to the EE. If your organization also has a flat dollar amount contribution limit, could you please advise what you contribute to medical insurance costs per month per EE. We are a small-mid size 60 EE sales service rep agency organization in PA.

crawfod

This sounds like you are considering only one flat amount your employer will pay per employee, regardless of dependents? So, if you have a two-tier plan, then the employee with dependents would pay 100% of the difference? I know all employers are struggling with health insurance for dependents, because that family rate is generally a killer. However, with your history and small operation, I would think morale would be bad if you only pay one set amount, and turnover will occur quickly among those with families. The cost of replacing skilled people, especially finding someone who needs family insurance, could quickly offset your savings in health insurance.

Let's suppose single coverage is currently $400, and family is $900, monthly. Would you set a flat rate at $400, leaving $500 for the employee to pick up?

Maybe I'm confused on this concept, so I'll stop. It just doesn't sound too good to me.

jbduffy

Today qe pay 80% of costs regardless of family size.What we are considering is finding an amt that we don't want to exceed as a monthly ER contribution and then contributing 80% of premium to a not to exceed ____. This will then put the increases in family coverage in years to come on the EE with the families.
Now that I am thinking about it some more... that doesn't sound fair either. Maybe we need to consider 80% of EE cost only and then 50% for dependents with no max. or 80% to a not to exceed $ amt that is different for each family size. Currently we pay $670 for a family in one state and as high as $1100 in another. Singles range from $220-500. Currently we spend an any of $500/EE per month. What I have found is that since we pay 80% of premium for dependents and 80% for all increases on those same dependents, our EE don't often think about trying to move dependents off in situations where those same dependents have coverage elsewhere. Despite the huge costs for insurance, I still have EE with spouses and dependents w/double coverage.
I posted the question to see what other companies my size are doing.

MS HR

we pay 95% for single coverage.
55% for family ('ee, spouse, children)
55% for employee and children (no spouse)
That way, if our costs keep going up, so does the employee's share. Conversely, if employees remember to go in-network and generic drugs, costs may go down and so will their premiums.

HCCADC

We pay one flat rate of 140.00 regardless of coverage selected. It is expensive for our employee's that have families, but we are nonprofit and really can't afford much. I recently got the company to contribute 150.00 with the rising health cost increases. I have also looked at changing the co-pays that employee's pay to offset costs too. It is a tough situation right now, especially for those of us that do not have any 'extra' money to contribute. I have to agree with the other posts on the morale issue, though. To have such a drastic change isn't going to go over well with employees. I had a problem with increasing the employee contribution 50.00 more a month. Good luck!

jbduffy

Thx for all the feedback. We have decided to leave the health insurance program of 80/20 in place and eliminate the STD program that has only been used 3x in 10 yrs for maternity related claims only. Eliminating this benefit, one that is far less important for most EE, will help to offset the increase in the health.
We don't expect that this change will hurt morale or cause any problems with our EE. We still have an LTD policy that kicks in at 90 days.

HRQ

For HMO, we contribute 50% for employee-only coverage, and split the difference on the additional levels of coverage.

For PPO (WAY more expensive) we contribute the same dollar amount as HMO, so the employee picks up the difference in cost when selecting the PPO.

We were looking at a 24% increase in medical premiums this year, so we did some creative re-arranging with other benefits, changed dental plans, etc. Reduced the "free" stuff and passed on only part of the medical increase to employees.

Our concern is, we did so many changes to deal with THIS year's increase, what are we gonna do next year if/when it happens again? There's not much left to "play" with.