A Better Way for Employers to Offer Health Coverage

Second only to payroll expenses, the largest expense for most employers who offer benefits is their group health insurance plan. It is important for employers to offer health coverage and remain competitive to attract the talent they need, but this cost has grown to an unsustainable level.

Fortunately, there is a solution.  The Affordable Care Act changed many things in the health insurance industry and if your business is still offering health insurance the same way it did in 2013, money is being left on both sides of the table.

Read on to learn more about how to reduce health insurance costs.

What exactly is group health insurance coverage?

Group health insurance is an employer-sponsored plan typically offered to full-time employees who have been with the company for at least 90 days.  The employer selects the benefits and other plan details of the group plan, and options are often limited to one or two plans for the employee to choose.  By law, the employer must pay a minimum of 50% toward the cost of the employee-only premium. But, there is a problem with group health insurance.

The odds are stacked squarely against an employer trying to select the elusive “one-size-fits-all” health plan for their employees.  Granted, years ago the process was easier because costs allowed the employer to choose a plan with great benefits at a reasonable price. Those days are gone.

Average Annual Health Insurance Premiums and Worker Contributions for Family Coverage, 2003-2013.

Average Annual Health Insurance Premiums and Worker Contributions for Family Coverage, 2003-2013.

With plan benefits getting worse, an increasing amount of the cost has been passed on to employees as companies struggle to remain profitable.  Not to mention, when it comes to health insurance there truly is no such thing as a “one-size-fits-all” plan.

What is the solution?

Individual health insurance plans have been less expensive than group plans for decades.  However, a primary challenge for individuals who shopped for their own coverage was qualifying based on health.  In the past, applying for an individual health insurance plan included a myriad of health questions that could yield a higher rate or a denial for coverage altogether.

The Affordable Care Act eliminated this obstacle.  In addition, individuals and families may qualify for federal tax credits further reducing their health insurance costs if they meet a few requirements including:

  • No access to a group health insurance plan through an employer.
  • Household income at or below 400% of the Federal Poverty level.

In many cases, the federal tax credits available are sufficient to cover the entire cost of some plans and reduce other options down to only a few hundred dollars a month.

 An employer-sponsored group plan is not only costing a fortune for the employer, it places an incredible and unnecessary burden on the employee who needs affordable coverage for their family. Now that one’s health status is no longer cause for being denied for health coverage, individual coverage could be the best option for your business.

Finding the right insurance for your business is tricky.  Crosspointe Insurance Advisors will work with you to determine which program fits your needs, while keeping it affordable for you. Give us a call today or submit a request for a quote to find the best coverage for your business.