Losing Insurance as a Benefit
TLC Shelly
34 Posts
A very small percentage of our workforce takes advantage of our insurance group coverage. Most of our employees are either still in college and on parents insurance, on spouses insurance, or just don't care about insurance. The ones who are on our group plan are generally over 55 and with chronic health issues, so our premiums jump drastically each year, which only makes fewer employees want to participate. This year, we have reached the point that we no longer qualify as a group.
Our administrator wants to give the employees who are currently on our group plan a raise equal to the ER contribution of the premium (I'm suggesting this just be called an insurance allowance rather than an increase in hourly wage), and help them in their search for individual insurance. I'm not completely comfortable with this approach but can't put my finger on why. Other than affecting employee morale, do you see any potential problems with this plan?
Our administrator wants to give the employees who are currently on our group plan a raise equal to the ER contribution of the premium (I'm suggesting this just be called an insurance allowance rather than an increase in hourly wage), and help them in their search for individual insurance. I'm not completely comfortable with this approach but can't put my finger on why. Other than affecting employee morale, do you see any potential problems with this plan?
Comments
Can your current health group company offer these EEs individual policies?
Do you feel that other EEs not electing health coverage will feel slighted if they don't receive the same "insurance allowance"?
Our current company wants to offer individual policies to our emps, I'm guessing based on claim history because the rates cover quite a range and significant increases for most people.
My biggest concern is that other employees will feel that they are being left out of a "new" benefit. The management side of me says they have no reason to feel that way, but the worker-bee side of me can sympathize. (We don't give total compensation statements.)
We had a similar story 3 years ago, with a couple of distinctions. First, we paid all full time EEs $6,600 per year, then required them to have major medical. They could choose our group plan or go elsewhere, including spouses plans, etc.
The same thing happened with our group plan; only people who could not get a better, cheaper plan used it. The EEs paid their individual premiums through payroll deduction and some of them paid significantly more than the allowance we gave. After two years of 45% and54% increases, we changed as follows.
Went out and negotiated with several carriers, then selected a decent plan that basically cost about $300 per EE. We adopted the plan and then required each EE to participate, we paid the EEs premium, they paid any dependents, spouses, etc.
We then rolled $3,600 of the $6,600 allowance into each EEs salary and kept the remaining $3000, which we used to buy the group plan.
Lots of problems at first because some of our EEs are native americans and have free health care, some are military spouses with essentially the same free care. Some, like me, were on their spouses plan. This plan was better and a bit cheaper at the time.
Lots of moaning and threatening to move on from the EEs, but we stuck to our guns and in the end, did not lose one EE from this event. We are still with the same carrier - our premiums are under control now (knock on wood) and people are used to the program.
Tough choice, but we had to change the equation or we would have been in deep ......
We decided to pay $300 to ALL full time employee intos a Section 125 Cafeteria Plan. The employee can then chose from several options as to how to spend their allowance (daycare, unreimbursed medical expenses, health care, aflac policies).
Our employees were paying $400 out of pocket (plus the $300 we contributed) so they were used to high premiums. Those that could no longer get individual plans due to health conditions had the Iowa Comp Plan to go into. The plan is expensive but less then what they were currently paying!
Employees who were previously receiving no benefit were now also getting the $300 a month benefit which was a big hit!