Small firms’ health plans stay­ing com­pet­i­tive

Employee Benefit News - - CONTENTS - BY BRUCE SHUTAN

New data sug­gests that firms with fewer than 100 em­ploy­ees can com­pete for tal­ent along with big­ger com­pa­nies.

Small em­ploy­ers are of­fer­ing com­pet­i­tive health in­sur­ance ben­e­fits rel­a­tive to larger em­ploy­ers and, in fact, some are do­ing a sur­pris­ingly bet­ter job of con­tain­ing costs. That’s the un­der­lin­ing mes­sage of a re­port from health in­sur­ance agency United Ben­e­fit Ad­vi­sors. The re­search also sug­gests it’s a win­ning for­mula in the war on tal­ent.

“You don’t have to be a For­tune 100 com­pany to be a great place to work,” says UBA Pres­i­dent Peter We­ber. “Telling cur­rent and prospec­tive em­ploy­ees that, for ex­am­ple, your PPO plan of­fers the same cover­age, de­ductibles and co­pays as very large com­pa­nies, or that your monthly pre­mi­ums are lower than what other em­ploy­ers your size are of­fer­ing, is a great way to chal­lenge mis­con­cep­tions, win tal­ent and build loy­alty.”

When an­a­lyz­ing the av­er­age an­nual cost per em­ployee, UBA found that part of the small-busi­ness mar­ket is cut­ting a bet­ter deal than com­pa­ra­bly sized and even larger firms.

That sweet spot ap­pears to be groups with 25 to 49 em­ploy­ees, whose av­er­age cost is only $9,165 com­pared to $9,727 for all em­ploy­ers. There also was just a 5.3% dif­fer­ence be­tween em­ploy­ees in small groups who paid $3,557 to­ward an­nual health in­sur­ance ben­e­fits rel­a­tive to $3,378 on av­er­age for those across all plan types.

To be fair, We­ber notes that many small groups, un­like their larger coun­ter­parts, were able to main­tain pre-Af­ford­able Care Act plans at bet­ter rates says be­cause of var­i­ous rules de­signed to level the play- ing field. They in­cluded so­called grand­moth­er­ing and the Pro­tect­ing Af­ford­able Cover­age for Em­ploy­ees Act.

In ad­di­tion, those with 25 to 49 em­ploy­ees also led oth- er small and mid­size firms on em­ployer con­tri­bu­tions to an HSA. For ex­am­ple, they con­trib­uted $543 on av­er­age to a sin­gle HSA vs. $474 for all em­ploy­ers.

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