There has never been a more important time to take a long, hard look at your employee benefits package and how it should be structured moving forward. With Obamacare breathing down our necks and new regulations and taxes at every turn, now is the time to sit down with a trusted broker and formulate a strategy that best meets the needs of your company, says Kenan Knight, account manager at Ashton Staffing Inc.
“Gone are the days of cookie cutter options and spreadsheet quotes for your renewal meetings,” says Knight. “If you are not planning on how to deal with the Patient Protection and Affordable Care Act (PPACA) and the changing landscape of employee benefits, then you are planning to fail.
Smart Business spoke with Knight about how to prepare for the upcoming changes and the options available to businesses when it comes to health insurance programs.
What options do employers have when it comes to shaping their benefits offerings?
There are still many options available for business owners when it comes to shaping their benefit offerings. These depend on how many employees you have, how your company is structured and how large a role your health insurance package plays in hiring and retaining great personnel in your industry. As of now, employers can still decide on what coverages they wish to offer, how much they wish to contribute to the cost, whether a wellness plan is feasible and/or beneficial and if you would like to self-insure or be fully insure.
As we move toward 2014 and the full implementation of PPACA, we will see fewer and fewer options available as there are more government mandates and fewer players in the health insurance market.
What should a company look at to make these decisions?
Company structure is one place where business owners should look in dealing with the rising cost and compliance of health insurance packages. Within your company structure, there are several questions you should ask when it comes to dealing with benefits packages.
Can you 1099 some or all of your employees so you don’t have to offer benefits at all? This is certainly an option, but don’t overlook how this will affect morale and your ability to hire and retain good employees. Would using a temp agency be beneficial so that the temp agency is providing the benefit package and not you company? Is your company set up so that you can offer a ‘management carve-out’ to have different levels of benefits for different levels within your company?
What do you consider a full-time employee and what does your insurance contract consider a full-time employee? Some carriers allow you go down to 30 hours a week and still consider an employee full time, which may allow you to move more people onto your plan. Or, you can set full time as 40 hours, which may allow you the flexibility to move some people off of your plan. Again, carefully consider how all of this will affect morale and also be aware of what your competitors are doing.
What kind of guidance can employers expect from a broker/consultant?
The level of service you receive from your broker is more important now than ever. If your broker is still just coming in with a spreadsheet of your current plan and similar plans with other carriers, it is time to start looking for a new broker. Gone are the days of simply jumping from carrier to carrier or just changing a deductible or co-pay. Regardless of whether the Supreme Court strikes down PPACA as unconstitutional, the health insurance landscape has and will continue to change.
States and insurance carriers have already taken so many steps to deal with the impending complications of PPACA that things will never go back to how they were. Your broker should already be talking to you about how PPACA will affect your company and what you can do to stay ahead of the curve. A once-a-year renewal meeting is no longer enough.
Your broker should have tools in place to help you facilitate insurance information to your employees; many online tools have been available for years and you should have one if you have 10 or more employees. The broker should also be talking to you about your company structure and how you might rearrange it to deal with the new landscape. Another tool your broker should be sharing with you is a benchmark report showing what companies similar to yours are doing for benefits.
Finally, your broker should be talking to you about wellness, especially if you have 50 or more employees. Wellness is an area in which you can hope to control at least some your own insurance cost by helping your employees get and stay healthy.
What common mistakes do employers make during this process, and how can they avoid them?
The main mistake employers make is starting the renewal process too late. Business owners and HR managers have a lot of moving parts to deal with on a daily basis and many times will only deal with things as they come up. When that happens with benefits, you are in a rush to simply find a comparable plan that doesn’t raise costs or lower benefits too drastically. This is a pitfall you can no longer afford.
As a rule of thumb, you should start the renewal process at least three months before your renewal date. Have a mid-year meeting with your broker and discuss your concerns and needs so that, together, you can start to formulate a plan of action. If your broker is stuck doing the same old thing, it is time to start interviewing new brokers. Every company and every situation is different, so having a trusted broker is key to answering your benefits questions.
Kenan Knight is an account manager at Ashton Staffing Inc. Reach him at (770) 419-1776 or [email protected].
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