Employee Health Insurance Programs

Anthem/Blue Cross recently announced a 39% rate increase on individual policies, which they put on hold after the significant negative firestorm they created. Blue Shield has imposed increases on HSA plans of 20-67% in the last year. Mid-size and large group plans are faring better; however, “better” is somewhat relative when it’s still in the 13-15% range year after year. Maintaining a health insurance plan for your employees is becoming more challenging every year.

I have spent a large part of the past 20 years managing the benefit plans for YPP and it’s become more difficult each year to find that balance between affordable rates and quality of coverage. No one wants to provide a plan that employees don’t believe gives them adequate insurance benefits, but doing so has become much more difficult.

YPP’s HR Managers have spent a lot of time in recent years helping clients evaluate their benefit offerings and identify ways to manage costs. This assessment is different for each business, since it can include any of the following:

  • What is the goal of providing benefits? Retention is normally the answer, but has it really helped retention and do other companies you compete for candidates with offer them?

  • What classes of employees should you identify and provide benefits for? If you establish these correctly, you do not have to provide the same level of benefits for each class.

  • What contribution level should you provide, balancing the need to meet the carriers’ contribution and participation requirements with premium costs.

In this challenging economic environment with all signs pointing to staggering benefits cost increases your HR staff needs to take a proactive approach. It isn’t good enough to just passively shrug off the annual cost increase. Challenge your HR staff to give you a complete picture of the competitive landscape and the internal organizational dynamics driving your benefit structure. Some well spent HR creativity can minimize your benefits cash outlay and maximize your return.

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