The cost of healthcare continues to increase unchecked. The result is that premiums go up each year and our response is to reduce benefits. Deductibles have gone beyond the reach of many insureds who will experience financial disaster long before they reach these lofty heights. Copays for physician office visits, emergency room charges and prescription copays are becoming a thing of the past just as costs in these areas skyrocket beyond our budgets. Now many employer plans have become too expensive to use and employees are dropping coverage.
What can employers do to help employees whose incomes cannot justify participating in the group plan offered? Discontinuing the group plan to allow employees to select coverage, carriers and networks is one solution. In some cases employees can even qualify for federal subsidies that could match the portion of the premium that employers have provided in the past. But beware if the employer is large enough that penalties would apply for not offering coverage. Not only are these fees charged annually per employee, but they are also not tax deductible. Additionally, what does dropping an employee benefit as significant as group health insurance do to the employers’ ability to attract and retain top talent?
The solution is to create a “bouquet garni” by combining alternative products to meet the needs of those who are falling off group plans. By matching traditional indemnity plans with specialty products for accidents and sicknesses we create a patchwork of coverage that addresses the types of claims that are most likely to occur. When we are able to add in contemporary programs of tele-medicine and prescription discount programs, coverage begins to address the bills that are most likely to be incurred. Yet, the insured is still not Affordable Care Act compliant and will likely have to pay the penalties assessed, so this solution is far from perfect.
Our best suggestion to employers is to continue to provide the best plans possible to their employees. Thoughtful selection of plan design including careful review of provider networks and prescription formularies will show employees that commitment to the benefits package has not changed.
Simultaneously offering an alternative to the traditional plan will be well appreciated by the employees who are desperate for a less expensive solution. Making this option available as part of the employer group package can add great value to the employer offering, but be sure to make appropriate disclosures of risks. Some of the most difficult issues for employees providing their own coverage can be mitigated by employer involvement in plan selection and payroll deduction.
There is no perfect answer to the problem of health insurance premiums being unaffordable at the same time that plan benefits are too lean, so creativity becomes critical. We at CDA have decades of experience developing employee benefits packages tailored to specific groups. Please let us know if we can help you review your plans to be sure that they address the needs of all of your employees. Contact us at CDA, Inc. for assistance today!