7 Creative Benefit Strategies For 2010

Whether it's the debate raging in Washington about health care reform, small businesses dealing with the ever-increasing premiums for employee benefits or individuals trying to secure health insurance for themselves - health insurance is on everyone's mind these days. Well, I don't know where any legislation will end up in Washington so let's discuss some very practical ways to deal with the challenges relating to health care today. If you're like most average small business owners in the Lehigh Valley with just three or four employees, you're wondering if there's any real impact you can make on your companies employee benefits structure. The answer is most definitely yes and I'm going to offer 7 very easy ways to accomplish that task.

1. Increase plan deductibles - For so many years the Lehigh Valley has been dominated by extremely low deductible very rich health plans that are great for the employees but are choking the business financially. The days of $500 individual deductibles are over.
2. Consider implementing a High Deductible Health Plan(HDHP) with and HSA component - So, if you're going to ask your employees to pay a greater portion of their health expenses, why not do it with an individual health savings account that is tax-free going in and coming out to pay qualified medical expenses. Oh, and by the way, the money continues to grow with interest.
3. Combine a higher deductible plan with an Accident Policy - Accident policies are very inexpensive and pay a lump sum to the individual in the event of an injury as a result of an accident. (Example: increasing deductible to $1,500 and implementing a $2,000 accident policy on each employee. With the savings realized in the premium reduction you can more than afford the policy. If the employee is injured because of an accident they will get a lump-sum payment of $2,000 to cover expenses).
4. Establish or convert to a defined contribution health plan model - This strategy is nothing more than encouraging your employees to obtain individual coverage that you will help reimburse them for in a fixed amount. There can be some inherent pitfalls with this model as it relates to pre-existing conditions.
5. Consider switching insurance providers - The Lehigh Valley has long been dominated by the "Blues" which offer outstanding coverage and expansive networks of provider care but typically have the highest premiums in the market. I'm not knocking the "Blues" because I sell those plans to - it just may be time to shop the market.
6. Consider self-funding for benefits like dental coverage - Dental is one benefit that functions relatively smooth and it offers a pretty predictable expense model that makes self-funding attractive for some employers to set-up. This will also reduce your dental premiums significantly.
7. Don't just look to renew your existing plan this coming year but instead sit down with your broker and talk through some of the strategies that I've outlined here. That's our job!

If you haven't heard from your broker since last years renewal then maybe we need to talk. Or, if you don't have a broker to help you through some of these very challenging employee benefit waters then please reach out to me at bknauss@employeemployersolutions.com, visit my website at www. employeemployersolutions.com or Twitter me at http://twitter.com/mployebenefits

Consumer Driven Health Plans

The term, Consumer Driven Health Plans, has been gaining a lot of momentum over the last couple of years with the cost of health insurance premiums spiraling out of control. There's been discussion for some time in small business circles about shifting more of the responsibility for health care needs to the employees rather the employer. Business owners of all walks of life are quickly coming to the realization that they are ill-equipped to manage and administer the complexities of employee benefit plans. Aside from that, they also know that the days of low deductible health plans are all but a thing of the past. The premiums for these low deductible plans are chocking them financially. The biggest, and maybe, the only way to make a significant impact on health insurance premiums, is raising the deductible thresholds that employees are responsible for meeting before the plan covers expenses. Many employers are reluctant to pursue this necessary strategy to get a handle on their cost but it's completely unavoidable in today's economy.

So, it begs the question. What can an employer do to lessen the impact of employees being responsible for meeting higher deductibles? The answer is; doing it in conjunction with a Health Savings Account(HSA) for each of their employees. Each employee has this HSA set-up in their name for the purpose of making tax-free contributions into their account to ultimately cover the qualified medical expenses they're now responsible for with a High Deductible Health Plan. This gives the employee greater control and flexibility over making their own health care decisions. The IRS regulates the type of health plans that qualify for an HSA, as well as, how much money the employee can contribute to their HSA's.

Whether, it's the increasing trend toward higher health care premiums or the Federal and State regulations (COBRA and Mini-COBRA) of certain health plans - business owners are now faced with the very real task of shifting the responsibility for health care to the employees. Experts predict that Consumer-Driven Health Plan enrollment will spike in 2010 Read Full Article

For more information on Consumer Driven Health Plans, HSA's or how to effectively shift more of the burden for health care to your employees, email me at bknauss@employeemployersolutions.com visit us on the web at www.employeemployersolutions.com or twitter me at http://twitter.com/mployebenefits

2010 Health Savings Account(HSA) Changes

For those of you that have a Health Savings Account(HSA) in conjunction with your High Deductible Health Plan (HDHP), you should already be aware that the minimum deductible amounts, as well as, the maximum that an individual can contribute to their accounts are changing for 2010. The changes are as follows:

1. The minimum deductible amount must be $1,200 for self-only coverage and $2,400 for family coverage; increased from 2009 requirements.


2. The out-of-pocket maximum must be no higher than $5,950 for individual or $11,900 for family coverage; increased from the 2009 requirements.


3. The HDHP must be set-up with a combined medical/pharmacy deductible. This deductible must apply to the out-of-pocket maximum; no change from the 2009 requirements.


4. All medical and pharmacy services must be subject to deductible and out-of-pocket maximum except for preventative services.


5. The annual contribution limits are being raised to $3,050 in 2010 for individual coverage; increased from $3,000 in 2009. For family coverage the maximum is increasing from $5,950 in 2009 to $6,150 in 2010.

If you don't already have a compatible Health Savings Account component to your HDHP then it's time you switched. You're already having to ask your employees to pay a greater share of their health care expenses out-of-pocket; why not pay them with tax-free dollars. With a full court press of government takeover of health care just around the corner; you better make the switch now while you still can.

For more information on this and other employee benefits related matters; email me at bknauss@employeemployersolutions.com visit my website at http://www.employeemployersolutions.com/ or twitter me at http://twitter.com/mployebenefits

The State of Employee Benefits

If you're the average small business owner today, trying to wade through the complex maze of employee benefits, then you're not alone. I thought it would be valuable to share some market perceptions of other small business owners just like you. I'm generally not obliged to overwhelm you with a bunch of meaningless statistics but here are just a few that I think are valuable:

1. 64% of small business owners are not confident picking a health insurance policy that fits their budgets and their employees' needs.*
2. Furthermore, 60 percent said they are not confident they understand the tax implications of paying for a portion of their employees' health insurance premiums.*
3. Only 27 percent say they understand all the factors that can affect their small group health premiums.*
4. Employer-sponsored health plan costs are going to see a 10.5% spike on average over the next year. (side note; that percentage of increase is on a declining trend)*
5. 10% of employers surveyed indicated they reduced or eliminated retirement benefits as a cost-cutting measure in the past 12 months.*
6. 74 percent of Americans have a less than complete understanding of their retirement plans.*

* source for these statistics October 2009 issue of Benefits Selling Magazine

These figures seems to indicate that the overall broker/agent community hasn't done a real good job taking the time to understand the needs of their clients and what it is they're buying. That's why I specialize in the small business community of the Lehigh Valley. It's a market that has been completely under served and in large part ignored by the brokerage community. If you're a business owner that can relate personally to some of the statistics then maybe we should have a productive conversation. You can always email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com or follow me on Twitter at http://twitter.com/mployebenefits

Employee Benefits - Do More Without Spending More?

Many businesses are in the same boat today - trying to figure out the paradox between doing more with less. The arena of employee benefits is no different. Try suggesting to a small business owner the prospect of expanding his/her benefits package for their employees in today's economic climate and you're likely to get booted right out the door. Well, there is some daylight on this particular topic and the answer seems to be in a very hot trend right now in area of employee benefits and that is - Voluntary Benefits. If I were to ask you if you would like to expand your companies benefit offering without it costing you one more dime, you'd probably think I was trying to pull a fast one. Well, this is one "to good to be true" proposition that really is legit. The voluntary benefit market is one marked with very low-costs, low maintenance, very little administration and high pays high dividends on employee morale. You see, with the current climate of higher deductibles, co-pays and less coverage for existing health insurance plans, the voluntary benefit market is a welcomed sight. Disability and Hospital Confinement policies help with covering higher deductibles that employees have to pay. They also help with unanticipated expenses for extended hospital stays or long periods of being unable to work like groceries, transportation and child care expenses.

There are a full range of voluntary benefits that can be 100% employee paid such as dental, vision, limited-medical benefit plans, disability, cancer and critical illness policies, life insurance, accident and hospital confinement plans. That best part is, many of the plans are portable for the employee. That's right they can keep the coverage no matter where they go. Here's just a small sampling of some of these voluntary benefits:

1. Disability Insurance – An individual supplemental short-term
   disability income product that replaces a portion of income if
   someone becomes disabled due to a covered accident or
   covered sickness. There are plans that cover on and off-job or
   off-job accidents/sicknesses and a wide choice of benefit
   periods and elimination periods. This product features total
   and partial disability, portability, worldwide coverage and
   waiver of premium.
2. Accident Care/Public Sector Accident Care –
   A composite-rated, guaranteed renewable accident
   product that provides indemnity benefits for on and off-the-
   job, or off-job only accidents. Stand alone coverage
   for employee, spouse and dependent child may be
   purchased. Features include the same benefits for
   employee, spouse and dependent child; worldwide
   coverage and portability. Optional riders, such as disability,
   are available.
3. Cancer – An individual specified-disease product that
   pays a cancer screening benefit for specified screening
   tests. Upon diagnosis of cancer, provides benefits for
   treatments and resulting costs that individuals may
   require to care for their cancer.
   
4. Critical Illness – An individual specified-disease product
   that can help individuals pay out-of-pocket expenses
   associated with home health care, caregivers they may
   require for home, automobile modifications, mortgage
   payments, utility bills, other everyday living expenses and
   travel costs to and from treatment centers.

For more information about adding voluntary benefits to your existing benefits package, or even if you don't have a benefits package, email me at bknauss@employeemployersolutions.com or visit my website at http://www.employeemployersolutions.com/