Ask nearly any employee how they feel about the importance of health insurance and they’ll tell you it ranks pretty high on their list of priorities. Research backs this up time and time again. A 2017 Harvard Business Review survey reveals that employees value better health, vision and dental insurance over benefits like additional vacation time and work-from-home options.
As an employer or Human Resources professional, you know that health insurance is a must-have benefit workers want. What you may not know is how to choose a health insurance plan that keeps workers happy and attracts new talent to your organization. Here is a quick guide to selecting a plan that works for everyone.
Perhaps you’re an employer who has grown to the point where you have to legally start offering healthcare per the ACA, or perhaps you're still classified as a “small business” but would like to offer insurance as a retention and recruitment benefit. But where to start? Selecting health insurance for your employees may seem like an overwhelming decision. By breaking it down and approaching the decision step by step, you can better manage the decision making process.
First, don't try to do this on your own or through an add-on services from your payroll provider. It’s an understatement to say that health insurance in the U.S. is a complex topic. Just open a newspaper or scroll through any of the latest headlines on your phone and you’re likely to see several stories about ever-evolving health policies and healthcare laws.
Your best move is to hire an experienced employee benefits broker who can educate you on all matters benefits related, from legal compliance to an overview of the benefits marketplace. They can present you with the major medical carriers in your area and the type of medical plans available. They will handle the entire process, from workforce analysis and competitive benchmarking to vendor negotiations, contract review and contribution analysis. A good broker will also help you facilitate benefits enrollment and perhaps even some ongoing administration.
As you're just starting down this path, you'll first want to establish your goals with the program. Are you simply trying to fulfill a legal obligation, or are you trying to make yourself more competitive from a hiring and retention standpoint? Are you generally concerned about the health and well-being of your workforce? Are you interested in more preventative care and wellness or are you more interested in reactive or restorative care? (The latter being far more costly long term, but that’s a subject for a different blog post.)
An employee benefits broker (sometimes called an employee benefits advisor or employee benefits consultant) can help you untangle these and other thorny questions about ideal coverage, your obligations as an employer, and the overall impact on your bottom line.
Next you'll want to establish a budget you're willing to spend on healthcare. You'll be able to share some of this cost with your employees in the form of premiums, but ACA guidelines dictate how much of the cost can be shouldered by employees versus an employer. Once your medical plans are selected, your benefits broker will be able to put together a contribution analysis which will help guide your level of cost sharing with your employees.
Third, you'll need to decide who you want to cover. Are you only interested in extending this benefit to your employees, or are you willing to extend this benefit to spouses, dependents, and perhaps domestic partners? What about retirees? You’ll also need to determine when coverage starts, such as an employee’s first day or work, or first of the month after their date of hire.
Finally, you’ll want to put together the group of medical plans you wish to offer to your workforce. If you’re like most employers, you’ll offer more than just one plan (the average is two). If you have a diverse workforce in terms of age and health, you may want to offer one plan which is more traditional in nature, such as a higher premium but low deductible PPO plan (for your older, typically heavier users of the plan), and another plan with low premiums but a high deductible such as an HDHP (for your younger and typically healthier workforce).
If you're like more employers, health coverage will be just one of several employee benefits you'll offer. You'll most likey want to also consider dental and vision coverage, and also life and disability, just to name a few of the more common benefits being offered today. That said, many employers are also getting very creative when it comes to offering voluntary benefits, unique benefits, as well as those which don't cost a lot but go a long way.
If you are struggling with how to put together an effective employee benefits package, give us a call. We'd be happy to help.