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Many employers have dropped their group medical insurance policies and others are assessing whether to join the movement. Consider that premiums for individual policies continue to be less than those of comparable group medical plans. Consider also that employers are at risk for non-compliance issues of which they are not even aware when they provide group medical insurance.

Additionally, non-discrimination issues do not apply to individual medical plans so employers can skew benefit dollars toward favored employees. Add to that the dozens of hours saved when owners and HR staff do not have to shop plans, select benefits, manage payroll deductions, pay premiums, add, delete and make changes for employees and many more administrative headaches.

So why do all employers not drop their coverage? First, if an employer has a certain number of employees (including full time equivalent employees) there are federal penalties for not offering coverage. Second, contributions provided toward employee premiums are NOT deductible as benefit dollars, rather they have to be added to employees’ salaries. Maybe most important is that employer plans provide the discipline that many employees need to be sure that coverage is in force when it needs to be.

We have discovered with dozens of years in the health insurance industry and over eight hundred individual clients that it is increasingly difficult for individuals and families to stay on top of all the administrative issues that come with individual medical policies. Insurance carriers are not drafting premiums, not crediting payments, not in receipt of requirements sent by the insured when requested. How much does it cost an employer if an employee has to fight the battle with the insurance carrier on company time? Hours of access into the insurance company are generally limited to employer office hours and hold times are long. What happens to job performance if coverage is not in effect at the time of a claim due to an administrative bungle?

We met with our group clients last year and are preparing to do off-renewal reviews with our group clients again in the next two months to discuss which way the wind blows best for them. Employee benefit plans need to be reviewed regularly as the Affordable Care Act changes the rules and we need to interpret their intent as well as their penalties.

Additionally, group medical plans need to be assessed as part of the whole package of benefits an employer offers including disability, retirement, dental, vision and other benefits employees may not even be aware of. If your broker is not involving you in this discussion we would be happy to share our insight. Contact us at Czajkowski Dumpel & Associates, Inc. – we are here to help!