A Home Run for Employee Benefits
4 Tips to Reach Employee and Employer Satisfied Benefits
Based upon perceptions and assumptions, whether accurate or not, many employers have historically not offered health insurance coverage to all of their full-time employee populations. In many instances, coverage has been extended to only select groups of employees (e.g. management, salary, etc.).
In the past, this strategy was fairly common and acceptable. In today’s world though, with the evolution of the Affordable Care Act (ACA), specifically the employer mandate and individual mandate, this traditional approach has changed dramatically. And likely will continue to change in some aspects given the election results.
As it stands, employers with 50 or more full-time equivalent employees are left with two options:
- Offer minimum value and affordable coverage to all full-time employees.
- Don’t offer minimum value and affordable coverage to all full-time employees, and pay a non-tax deductible penalty to the IRS (either $2,000 or $3,000 per employee).
Assuming that we all agree option two should be avoided, the next question is: how can option one be achieved in an efficient manner? Before this question can be answered, we first must address a subsequent topic: what’s the goal of extending coverage to all full-time employees?
- Is it to comply with the law at a minimum cost/coverage threshold?
- Is it to offer a decent benefit package in an effort to attract and retain quality employees?
Depending on an employer’s goal, the answer to our primary question of efficiency will vary. For the majority of employers, the objective is in the middle. Offering quality coverage at a reasonable price point for the employer and employee is a home run in the employee benefits game! Employers can hit a home run with these four tips:
1. Offering products that meet the needs of the employee base.
- Are employees most interested in major medical coverage or in satisfying the individual mandate?
- Have you tried surveying your employee base?
- Will multiple options be offered (e.g. a base plan plus a buy-up)?
2. Evaluating cost efficiencies and liabilities of fully-insured versus partially self-insured plans.
3. Ensuring the health insurance program has good participation.
- More enrollments spread the risks, while low enrollment creates adverse selection and high premiums.
- Higher premium subsidies will lead to greater participation.
4. Effectively communicating the benefits program to your employees.
A long-term sustainable program must be planned for and continually tended to. This ultimately will ensure an efficient and effective health insurance program can be accomplished. For more information about how to hit a home run with your benefits plan, contact a member of the 'A' Team.
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