Dallas Fort Worth Texas employers: How to stop giving raises to your employee benefits advisers and group health insurance brokers.

If you are a Dallas Fort Worth,  Texas area employer, you may be unwittingly rewarding your employee benefits broker or group health insurance broker for poor performance, and for not having your company's best interests at heart.

The average employee benefits and group health insurance inflation in the Dallas Fort Worth area typically increases in cost  to employers anywhere from 10 to 15%.  A ccording to Texas insurance law covering small group plans, a major illness or accident from a single employee can lead to a rate increase of 67% if the employer tried to change insurance carriers.  This  makes it financially difficult for a small to mid-size employer (less than 500 employees) to change group health insurance companies.  

In effect, a single group major health insurance claim to a small business locks the employer into potentially years of 15% rate increases from their current insurance company, as this is the maximum allowable annual rate increase according to Texas small group insurance law.

Any employee benefits consultant and group health insurance broker in Dallas, Texas should be rewarded for cost containment, not cost inflation.  Yet, as the rates increase for a small company group health plan, the broker's commssion income is increased.  The larger the annual rate increase, the more the group health insurance broker earns on the employer's business.

What is the incentive for a group health insurance broker to work on the client's behalf to contain benefits inflation when good advice limits their income?  And more importantly, what steps can a good employee benefits consulant or group health insurance agency be doing for their clients to contain group health insurance rate inflation?

First, a good group medical insurance broker should be a year-round valued advisor to the CFO as well as the VP of HR or owner.  If the employer only sees their group health insurance agent at annual renewal time, then the employer is not likely to get advice on strategies and methods to reduce employee health insurance claims.

Second, a quality employee benefits consultant should advise throughout the year how the employer can enact strategies that encourage employee behavior that reduces medical claims, and therefore lower rate increases.  Consumer driven health plans, such as health reimbursement arrangements (HRAs), health savings accounts (HSAs) and medical expense reimbursement plans (MERPs) motivate employees financially to reduce their health insurance claims, and offer various tax savings to the employer and the employee.

Third, a really proactive group health insurance broker can also advise the employer how to incorporate an employee wellness plan that encourages and rewards employees for healthy lifestyles. 

A corporate wellness plan sponsored by the employer, if properly structured, can help at-risk employees lose weight, leading to a reduction in obesity and related diseases such as diabetes, heart attack, high blood pressure and stroke.  An employee  wellness plan can also encourage employees to quit smoking, which can lead to a direct reduction in cancer and heart/stroke disease.

The return on investment to the employer for a company wellness plan that specifically targets weight loss through diet and exercise, and smoking cessation, is tremendous.  A dollar spent by the employer in  a well-designed employee wellness plan can yield five to six dollars in saving to the employer in terms of a reduction in future medical claims, medical insurance increases, and lost productivity, plus a reduction in future pain, suffering and mortality among employees.

As a knowledgeable employee benefits consultant and group health insurance broker, Group Benefits Advisors advise our clients throughut the year how to control the costs of employee benefits, without a reduction in the level of benefits offered to employees.  For more information and for advice about other ways that Dallas, Fort Worth, TX employers can control the cost of employee benefits, contact Mike Chapman, (214) 764-6315, extension 120, or (888) 398-6246 toll free.