Strategies for controlling company health insurance costs

Fall is here, which means annual health insurance renewal increase notifications are coming soon.

The majority of Iowa-based employers in the small-to-medium employee size range will soon receive their annual group health insurance renewal notification for a Jan. 1 effective date. Early indications are that rate increases will be in the 10 percent to 18 percent range before any changes to benefits are considered and implemented.

The most common changes are focused on increasing deductibles, out-of-pocket limitations and office visit/prescription co-payments. As of the date of this article, the Affordable Care Act’s Health Insurance Premium Tax is set to be re-instituted for 2018, which for some employers will add another 3 percent to their renewal.

As employers grapple with the cost of providing employees an attractive benefit, the following should be considered as a way to keep benefits an important part of their employee retention strategy:

• Have open and frank discussions with employees about the rising cost of health insurance and how these costs affect the business and their personal wages.

• Explore and consider implementing an alternative funding arrangement that sets premiums based upon the health status of employees and their dependents.

• Analyze and evaluate employer and employee contribution strategy to determine if it meets the needs of the employees and the employer.

• Consider o ering a Wellness program.

• Research the feasibility of offering employees a health insurance plan that limits access to a narrow provider network.

• Research the cost and benefits of joining a Professional Employer Organization (PEO), which in addition to the human resource administrative services, has a Master Group Health Policy.

Please contact me at Focus OneSource for additional information or to talk through options for your business.