Small firms’ health plans staying competitive
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.