Finding and retaining talented employees is a struggle for employers in today’s environment. A company’s employee benefits package is oftentimes a deciding factor for prospective employees looking for their perfect career and employer. As you can imagine, at ARC Benefit Solutions, our team fields many questions from employers on the best way to structure their employee benefit package, from cost control to plan structure to funding mechanisms.
Below are just a few of our most frequently asked questions along with considerations from our team:
What are the most requested insurance benefits from employees today?
More than 60 percent of all employees want health insurance. ARC Benefit Solutions fields questions from employers routinely on not only medical coverage, but disability plans, increasing life insurance amounts, and dental and vision benefits.
In our experience, employers and employees should be educated about the benefits of “paycheck protection insurance,” otherwise known as long-term/short-term disability. What is more important in a situation where employees are injured than protecting their income when they are unable to work?
What are average employer contributions to the health plan from small employers today? Should an employer be expected to cover the cost for my employee’s dependents as well as their employees?
Most employers pay the majority of the employee premium (although the minimum required by the carriers is 50 percent) and a smaller percentage for the dependents. One consideration would be what we call “spousal carve out,” or “spousal parity,” which is when an employer makes the decision to offer health insurance to the employees and their families; however if the spouse of any employee is offered health insurance through their own employer, the employer contribution may go all the way down to zero for that group of spouses (e.g. employer might pay 50 percent of any spouse’s premium who is not offered coverage through their own employer and could pay 0 percent of any spouse’s premium who does have an option to enroll with his/her own company). This cannot, however, be implemented for children as that would create a discriminatory situation. Some employers feel as if they are “subsidizing” other employer’s health plans if they do not implement a similar strategy.
Are my employees losing out on subsidies if I decide to offer a group health insurance plan?
If a qualified employer group health plan is offered, even if the employee waives the coverage, it will cause the employee to lose their right to any subsidy from the individual Marketplace. However, most employer plans can be structured to be a much better, cost effective option based on contribution levels, plan options, networks, etc. There are a few options for an employer that do not restrict the ability to qualify for a subsidy, although these types of arrangements may not work for every employer or every situation. These situations require a much more in-depth conversation with your ARC representative.
Should I offer a high deductible plan, which allows a pairing with a Health Savings Account (HSA) or a more traditional plan with copays?
Again, this question requires a much deeper dive as there is far more to consider than just cost savings alone. Many times, employers can offer multiple plans and base their contributions on a base option allowing employees to “buy up” to select an option that better fits their circumstances without increasing the employer’s costs.
Should I offer a Health Reimbursement Account (HRA)?
An HRA is a funding mechanism that can be used to reduce costs although there is some risk associated with implementing an HRA if not properly structured.
This type of structure allows an employer to lower the plan costs by raising the deductible, out-of-pocket maximum, etc. and implementing a reimbursement model to reimburse part of the employee’s out-of-pocket spend. In turn, money is only paid out if employees/dependents actually incur claims. Depending on how the HRA “bucket” is structured, we see an average of approximately 25 percent spend of the potential maximum exposure. Again, a much deeper conversation with your ARC representative would be in order but we have seen this be a very successful strategy.
ARC knows how to get creative while still considering costs, quality, and access for an employer’s plan offering, so reach out to us to find out what health insurance cocktail would be best suited for your situation.