Whether or not a small business in Dallas Fort Worth Texas offers a group health plan for its employees, the company president or business owner should have a solid understanding about the overall health of their employees and their employees' spouses.
A forward thinking small business leader in today's environment must realize that they have a responsibility and a duty to the company and to all employees to promote health not only in the workplace, but also at home.
In Texas, only slightly more than one third of small businesses of 250 employees or less today offer a group health insurance to their employees. The reasons for this are many, cost and affordability being the most prominent reasons. Group health insurance premiums for a family of four costs on average more than $20,000 per year in the Dallas Fort Worth area. Even if the employer covers all of the cost for covering the employee, often the employee cannot afford to cover the cost of coverage for their dependents.
Many small businesses hope to grow and prosper to the point where they can afford to offer a group health insurance plan to retain and hopefully attract talented employees. When a business first applies for a group health plans, it may find that the rates from insurance carriers have been "rated up" because of pre-existing conditions of the employees. In Texas, group health insurance carriers can raise the rates ("rate up") the health insurance premiums to small businesses of 50 employees or less by up to 66% based on the health conditions of the employees. So the already high standard rates for small businesses can quickly become astronomically unaffordable if there are serious health conditions among employees or the employees dependents.
And if a company already has a group health insurance plan, the annual rate increase can push skyward at renewal time if a serious health condition occurs among an employee or dependent on the plan. At that point, the options are few, because other health insurance companies will also base their rates on the health of the employees.
Does this mean that a Dallas Fort Worth Texas employer should only hire and employ healthy people? Absolutely not! To do so is clearly discriminatory and illegal.
Does this mean that a Dallas Fort Worth Texas small business owner should actively promote healthy lifestyles at work and at home by employees and their dependents, and should actively encourage and incentivize employees to improve their health? Absolutely yes! By doing so, owners and presidents of small to mid size businesses in Dallas Fort Worth can save their company and their employees tons of money, and improve the quality of life for employees and their family.
According to the Center for Disease Control, 75% of all diseases are preventable. The most dreaded and costliest of diseases, the ones that cause the most suffering and devastation to families, the ones that cost small to mid size businesses in Texas several billion dollars every year, and cost individuals and families several billions more, can be traced back to two lifestyle choices: weight/obesity and tobacco use.
Over two thirds of adult Texans are overweight, and over 25% are obese, and about 20% use some form of tobacco. These are lifestyle choices that individuals make that cost money, and cause suffering and death. Obviously, this is a serious public health issue, but it is also a critical health issue for any small to mid size Texas business, and one that every business owner must address. Every Texas business must address obesity and tobacco use head on, and actively work to encourage employees and their dependents to lose weight and cut tobacco use, or they subject their company to major catastrophic health claims, as well as lost productivity.
Is it fair that an obese employee or one who smokes pays the same amount for their portion of the company's group health insurance premium as an employee that does not smoke and is not overweight? And is it fair for the healthy employee to have to pay up to 66% more for their group health insurance premium that was rated up to the maximum by their health insurance carrier because an obese or tobacco using employee contracted diabetes, had a heart attack or stroke, or contracted cancer?
Is a key person in a small business, perhaps a sales manager or a plant manager who the business depends on for its survival, being responsible to their fellow employees and to the business if they are obese or if they smoke? And since an unhealthy dependent spouse or child may have the same impact on the company's health care expense and productivity loss risk, business leaders who are willing to tackle this issue also must extend the push towards wellness into the home as well.
A simple Employee Health Risk Assessment tool devised by Group Benefits advisors is the first place a small or mid size business person should begin. This tool is a simple color coded chart that a company president can assign someone in the company to fill out, or can even do themself within an hour or two. The chart assigns each employee ( and if possible, and recommended, adult spouses), a color according to their body mass index (BMI) and also assigns each employee and dependent as white for no tobacco use or black for tobacco use.
Tobacco use is a very straight forward "black and white" issue. Tobacco use causes death, but usually not before it causes years of expensive, debilitating and painful suffering. Group Benefits Advisors' Employee Health Risk Assessment tool allows a business owner to tally up the number of employees and dependents that use tobacco so that the business owner can implement a program that encourages tobacco cessation.
The more employees who smoke, chew or dip, the more likelihood of a serious health claim and loss of valuable employee productivity. But since death from tobacco use is certain and only a matter of time, a single tobacco user among employees or their dependents is a major health risk.
Body Mass Index is a simple calculation and is one of the best measures of body fatness. It is reliable in about 95% of adults. (The primary exceptions being athletes and body builders.) BMI calculation requires only height and weight, and is a quick and reliable measure that has been found to be directly correlated with a number of obesity and overweight diseases and conditions.
The calculation for BMI is very simple: weight divided by height. The concept is simple to comprehend: a 200 lb person that is 5'1" has a higher BMI than a 200 lb person that is 6'1" tall. The higher the BMI, the more obese and at risk an individual is for a range of weight-related diseases and health conditions. These weight related diseases include the following:
- High blood pressure
- High cholesterol
- Type 2 diabetes
- Heart disease
- Stroke
- Gallbladder disease
- Osteoarthritis
- Sleep apnea and respiratory problems
- Some cancers (breast, colon and endometrial)
And many of the above weight related conditions, such as diabetes, can cause a host of other diseases and conditions, such as blindness and nerve damage. Weight, and obesity, is a critical public health and private business issue, and if your small business is typical of the general Texas population, then it affects over two thirds of your employees and their dependents.
Read on to learn more about the Employee Health Risk Assessment for Dallas Fort Worth Small Businesses…
Filed under Consumer Driven Health Plans, Dallas Fort Worth Group Health Insurance, Employee Benefits Solutions, Employee Wellness, Group Benefits Advisors, Group Health Insurance Rate Texas, Group Health Insurance Texas, Health Insurance: Texas Small Group, Texas Group Health Insurance by on Jun 14th, 2007. Comment. 
Healthy Employees Save Dallas Fort Worth Texas Small Businesses Money
Very few Dallas Fort Worth, Texas small business owners or their employees will dispute the fact: that healthy employees are less expensive and more productive than unhealthy employees. Healthy employees have fewer medical claims, and have less absenteeism and less disability claims.
In fact, the Center for Disease Control estimates that 75% of all diseases are preventable. Imagine the tremendous savings to your business and to your employees if you could help prevent 75% of all the diseases among your workforce. Keeping employees and dependents healthy, helping employees improve their health, and helping employees with health conditions aggressively manage their conditions is smart business.
Another unfortunate fact is that only 4% of our country's health care dollars are spent on prevention, and 96% on detection and treatment of disease. This could be because the big health insurance companies reimburse big pharma drug companies, and medical providers such as doctors and hospitals are compensated for detection and treatment of disease and little attention seems to be given to prevention of illness and disease.
But the truth is that most of the diseases that are preventable are a result of lifestyle choices made by individuals. The State of
A single major medical claim from an employee or a dependent spouse in a Dallas Fort Worth small business's group health insurance plan can easily cost the company several hundred thousand dollars due to an increase in medical insurance premiums, and lost wages. These premium increases are compound, and impact a company for years. And a company with an employee with a single major health issue may be unable to find affordable group health insurance from another carrier because of the rate up on pre-existing conditions of the employee workforce or dependents.
Another major cost to small businesses is what is known as "presenteeism," or the loss of productivity of an employee with a health issue who is able to go to work, but who is not performing at capacity either due to the illness itself or due to the lack of concentration due to the illness. In other words, a major illness in the family may not keep an employee from showing up to work and drawing a pay check, but it may keep the employee from doing a satisfactory level of work. While you may think "it won't happen at my company," multi-year studies have proven that presenteeism is a more prevalent and greater expense to small businesses than medical-related absenteeism.
Big businesses in Dallas Fort Worth that can afford to self-insure their employee medical expenses can choose to implement employee wellness plans that identify at-risk employees, and can have programs that help employees and their family manage their existing illnesses and improve their lifestyles (i.e., lose weight and stop use of tobacco.)
But for small businesses, the need for a healthy employee workforce is as great or greater than in small businesses, and the consequences of an unhealthy workforce is much greater than in a big business. Small businesses usually cannot afford to have "on the bench" backup talent that big companies ovten have; the loss of a single key employer can devastate a small business.
Yet, there are very few simple and affordable solutions that a small to mid size business in Dallas Fort Worth Texas can implement that will help improve the health of the workforce. This post illustrates a foolproof solution by Group Benefits Advisors that can help small businesses build a healthier workforce and a healthier bottom line.
Filed under Consumer Driven Health Plans, Dallas Fort Worth Group Health Insurance, Employee Benefits Solutions, Employee Wellness, Group Benefits Advisors, Group Health Insurance Rate Texas, Group Health Insurance Texas, Health Insurance: Texas Small Group, Texas Group Health Insurance by on Jun 13th, 2007. Comment.
For any Dallas Fort Worth employer, whether a small company or big business, the continuous rise in group health insurance premiums is a critical issue. Like the weather in North Texas, everyone complains about it, but noone knows seems to know what can be done to stop the rate increases which continue to out-pace inflation. This post will show forward thinking business leaders in Dallas Fort Worth, Texas how to take positive action to reduce health care benefits costs permanently and have a healthy and productive workforce.
One week you read that Mercedes AG is willing to virtually give away its Chrysler division because of unfunded health care liabilities. The next week you read that Starbucks spends more on employee health insurance than coffee beans. As a business owner or CEO, whether in the cities of Dallas or Fort Worth Texas or one of the big suburbs like Irving, Richardson or Plano, you're probably worried about whether you can continue to afford group health insurance for your employees, and whether you will be able to retain your your key employees if you reduce or drop coverage.
A Bold Approach for CEOs to Reduce Benefits Costs and Increase Employee Productivity.
If you are a president or CEO and this post speaks to your concerns, then read this entire post for a bold but simple new solution to this problem, and challenge your human resources person to give it full consideration. Unlike other approaches, this approach offers a permanent solution that reduces the cost of health insurance premiums, but significantly reduces the cost of lost wages and productivity due to sickness.
Political Platforms For Solving the Wrong Health Care Problem
The "solutions" proposed by politicians from Democrats and Republicans won't do this, they just shift who pays for health care. Neither party's plans do anything to lower health insurance and health care costs.
The Republicans, both Bush and leading presidential candidates like Rudolph Giulaini call for an expansion of consumer-driven health plans and tax breaks like health savings accounts. The concept behind consumer driven health plans is that if an employer shifts more of the cost of health insurance and health care to the employee in the form of higher deductibles and an elimination of artificially low copays for doctor visits and medications, then the employees in the plan will avoid unnecessary doctor visits and become better shoppers to find lower cost health care, since they are responsible for more of the cost.
Democrats, including the leading candidates in the 2008 elections, have various proposals that range from nationalized health care or mandatory health insurance for all citizens, with public subsidies for those who cannot afford it. Part of the thinking here is that by covering most of the 42 million uninsured Americans, rates could be reduced, since those healthcare costs are borne by private and public hospitals, and the expenses covered by the rates hospitals charge those with insurance and by taxpayer subsidies.
As often occurs in American politics, two radically different ideologies offering two totally different solutions to absolutely the wrong problem, but intended to gather votes.
Real, Actionable Solutions to Health Insurance Inflation that Dallas Fort Worth , Texas CEOs Can Implement Now
Whether you are a business owner in Arlington or a CEO in Denton, there is a solution to runaway group health insurance costs that you can implement now without any "help" from government or politicians. This solution is perfectly legal, simple to implement, and while there is plenty of documentation about how much it can save your employees, when you understand it, you'll wonder why you your employee benefits consultant or group benefits broker has not proposed it.
Filed under Consumer Driven Health Plans, Dallas Fort Worth Group Health Insurance, Employee Benefits Solutions, Employee Wellness, Group Benefits Advisors, Group Health Insurance Rate Texas, Group Health Insurance Texas, Health Insurance: Texas Small Group, Texas Group Health Insurance by on Jun 8th, 2007. Comment.
There's a big problem with consumer driven health plans (CDHPs), which many employee benefits thought leaders in Dallas Fort Worth, Texas, and throughout the country claim are the "next great idea" to control rapidly escalating group health insurance premium inflation.
But the "problem" is not what its opponents claim. The problem is something totally different. Something so obvious, that it has been totally overlooked by now. But first, let me explain.
Group health insurance premiums for an employee in Dallas Fort Worth now average about $4,000 to $5,000 per year. There is some let up this year in inflationary trends, but with an aging population, the obesity epidemic, and the deterioration of healthy lifestyles anyone would easily conclude that Texans are in for a decade of double digit health insurance increases, perhaps around fifteen percent annual inflation in premiums.
So for the Dallas Fort Worth area employer who wants to attract talented employees, and for the employee who wants decent benefits to go along with their job, they can expect to pay at least twice the current amount by 2015 if the current trend continues. Something obviously has to radically change, and change fast.
A big proponent of CDHPs is Wal-Mart Stores, Inc. Tom Emerick, the vice president of employee benefits for the world's largest retailer, spoke in Dallas yesterday, Wednesday, May 23rd, addressing a gathering of emplyee benefits specialists at the Dallas-Fort Worth Business Group On Health conference in downtown Dallas.
Mr. Emerick had a three word recommendation for the audience ton how businesses can how to control health care: "high deductible plans."
Cost Shifting = Consumer Driven Plans
"Consumer driven health plans,” or CDHPs, is a term that describes high deductible plans that use “cost-shifting tactics” plus another tactic, “incentives” to reward employees for reducing their medical insurance claims. These incentives include monetary and tax incentives approved by the IRS that reward the employee for controlling the cost of their medical claims.
The rationale behind CDHPs is that if employees have to pay a greater portion of their own medical expenses, they will learn to be savvy consumers and become better and more motivated shoppers for their family's health care expenses.
The main keys for CDHPs to be successful in controlling medical insurance costs is first, to provide consumers with the edcuation and information tools so that they know how and where to shop for the best care at the lowest cost. "Price transparency" is the term used to describe the tools that consumers can learn which medical provider provides the best rated care at the lowest price. There is some progress in this area, but price transparency has quite a way to go.
The other tools are incentives, usually in the form of tax advantaged contributions to savings plans that the employer or the employee or both can set up to help the employee pay for some of their out of pocket medical expenses.
The general philosophy is that if consumers view these contributions that can cover the higher out of pocket expenses that an employee would incur with a CDHP, or high deductible health plan, as "their own money," they will spend it more wisely on their health care, than if they were given a very expensive health plan with very low deductibles, coinsurance, and copays.
Here's a brief overview of the most common types of CDHP incentives:
Cost Shifting = Consumer Driven Plans
The types of consumer driven health plans typically include High Deductible Health Plans. The types of IRS approved incentives include Health Savings Accounts (HSAs), Health Reimbursement Arrangements (HRAs), and Medical Expense Reimbursement Plans (MERPS).
Health savings accounts (HSA) were first introduced in 2004. These allow an employee or employer to make contributions into a tax-favored account that can be used for medical dental and vision expenses.
The amount that can be contributed to this account is set by the IRS each year. Any funds contributed to this account are taken as an income tax deduction, and the funds in the account grow in interest and appreciation tax-free. Funds not used in the year contributed rollover and grow tax-free to future years.
As long as the money in the HSA is used for IRS approved medical, dental and vision expenses, the funds in the HSA are never taxed. Money contributed by an employer or an employee to an HSA is controlled by the employee.
In order to set up an HSA, the employee must have an IRS qualified High Deductible Health plan. There are specific differences in these plans, namely that the plan has a higher deductible (for 2007, a minimum of $1200 for an
In other words, the employee uses the money in their HSA to pay for medical expenses, and can “keep” any remaining contributions in the HSA which then grows tax-free for use in the future. If the employee is a “good consumer,” so the thinking goes, they will find ways to save more of their HSA contribution that they can use in future years.
Cost Shifting + Incentives + Self funding = HRA
The second most popular CDHP incentive is the Health Reimbursement Arrangements (HRAs). These are another common form of “carrot and stick” cost shifting and incentive tactics, but add the tactic of partially self-funding. HRAs allow an employer to reimburse employee medical claims, usually through a third party administrator (TPA) service.
In the case of an HRA, the employer purchases a group health insurance plan with a higher deductible, for instance, a $3,000 deductible plan instead of a $1,500 deductible plan. The employee submits claims to the TPA for review and reimbursement, and the employer reimburses the TPA for the claims and the services. The employer has in this case “taken on” or “partially self-funded” the risk of $1500 per employee in medical expenses.
But since a majority of employees never meet their deductible, the employer will more years will pay fewer claims, and will save because the cost of a $3,000 deductible plan is less than a $1,500 plan. And since the insurance company has fewer medical claims to pay, the claims history of an employer with an HRA is reduced, which can lead to a lower rate of increase in premiums.
With an HRA, the employer may elect to allow any portion that the employer contributes to each employees deductible may be used in future years by the employee, which is an incentive for the employee to shop for lower cost health care. Unlike an HSA, the HRA funds provided by the employer for the employee’s health care belongs to the employer, and if the employee leaves the company any remaining funds can remain with the company. And unlike an HSA, with an HRAthe health insurance plan can include Rx and office visit copays.
MERPS
Medical Expense Reimbursement Plans (MERPS) are governed by a 50 year old federal regulation, the IRS Section 105. The Section 105 regulations outline how an employer can set up a tax-favored reimbursement plan for specific medical expenses of employees. MERPS require a plan document describing the plan, and the plan itself and the administration of the plan and how medical expenses are reimbursed are handled by a third party administrator (TPA).
Properly drafted and administered medical expense reimbursement plans provide employers with additional methods for reimbursing specific medical expenses of employees and dependents. MERPS can be used as stand alone, or in addition to an HSA or HRA plan.
Again, MERPS can incorporate the cost-shifting, incentives, and self funding tactics described above. MERPS can also allow an employer to reimburse employees on a tax-favored basis and at a lower cost for than if the expenses were covered in a fully insured group health plan.
For example, an employer can select a high deductible health insurance plan that does not reimburse Rx or office visit copays until the deductible is met, but then through a MERP and through a TPA reimburse employees completely or partially for the cost of copays or other medical expenses. These copay benefits can often be provided to employees at a lower cost than if they were included in the group health plan, and this tactic may save an employer as much as 10 to 20% of the premium than if they purchased all of the benefits in a group health insurance plan.
MERPS also allow an employer to reimburse employees on a tax-favored basis for specific expenses that are usually not covered in fully insured group health plans. This is the area where MERPS really shine. Combined with the other tactics discussed above, MERPS can save employers and employees in medical expenses.
MERPS can also be used to fund on a tax-favored basis employee benefits programs that are not covered by fully insured group health insurance plans but that can significantly reduce the number of catastrophic medical claims, lost time and wage productivity, and deaths.
Conclusion
So there you have the alphabet acronym stew of how health insurance industry pundits propose to make health insurance more affordable. As a group benefits consultant and group health insurance agency in Dallas Fort Worth and North Texas, Group Benefits Advisors uses all of these tools listed above.
Generally, and perhaps after some gnashing of teeth by employees, companies that purchase high deductible heatlh plans and provide their employees with HSAs, HRAs, or MERPs can generally expect to see a significant, but moderate reduction in inflationary increases in group medical insurance expenses.
However, we are increasingly convinced that CDHP advocates are making the wrong argument, and missing the point. In fact, CDHP advocates might be winning the battle, but they are losing the war on affordable health care and health insurance.
With a national election less than a year and a half away, the general public's and business community's dissatisfaction with the current health insurance and health care system are raising the likelihood that candidates in favor of universal or nationalized health insurance or health care will be elected.
As a concerned patriotic citizen, the spectre of nationalized heatlh care scares me sick. This same government that watched while New Orleans sank, and that alienated the Muslim world and justified invasion of Iraq over WMDS that never existed is now supposed to fix our broken health care and health insurance system?
CDHP and High Deductible Group Health Insurance Plans Fail to Protect Employees and the Bottom Line
The fact is, these concumer driven health plans and high deductible health plans and the overall philosophy that drives them are all too little, too late. They do not do enough to control a Dallas Fort Worth company's health insurance costs. Its a little like organizing a bucket brigade when there's a fire already raging in the barn. And the CDHP philosophy just emboldens the universal health care national health insurance proponents to work that much harder to get their candidates elected.
Don't despair, and don't think we've gone sour. We'll explain why, what and how Dallas Fort Worth employers can effectively control health care and health insurance costs in our next few posts.
This brand new strategy is ever so simple, and so powerful, and so effective, you will wonder why it has never been attempted, and why not politician or legislator has ever endorsed it. It is a strategy so effective that it could save the country enough money to provide private health insurance to every citizen, and that could provide employers with double digit health insurance premium decreases for years to come!
Filed under Consumer Driven Health Plans, Dallas Fort Worth Group Health Insurance, Employee Benefits Solutions, Employee Wellness, Group Benefits Advisors, Group Health Insurance Rate Texas, Group Health Insurance Texas, Health Insurance: Texas Small Group, Texas Group Health Insurance by on May 24th, 2007. Comment.
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.
Filed under Consumer Driven Health Plans, Contact Group Benefits Advisors, Dallas Fort Worth Group Health Insurance, Employee Benefits Solutions, Group Benefits Advisors, Group Health Insurance Quote, Group Health Insurance Rate Texas, Group Health Insurance Texas, Health Insurance: Texas Small Group, Texas Group Health Insurance by on May 5th, 2007. Comment.
The Boomer generation is rapidly retiring–over 12 million of us in the next decade will be of legal retirement age.
For many Dallas Fort Worth employers, this is a major brain drain that threatens the effectiveness of many organizations. The knowledge base and breadth of experience that members of this generation possesses cannot be easily replaced. Yet, the big health insurance companies and the state and federal insurance and tax codes force many employers to show their retirement age employees the door.
Many Dallas Fort Worth area employers are developing specialized employee benefits plans that incentivize their most valuable boomer employees to work past retirement age. Yet, this comes at a potentially great risk and cost for the company, as any company with more than 20 employees must offer the same group health insurance plan to their age 65+ employees as they do to their younger employees.
This risk is an actuarial certainty: older employees have a considerably higher likelihood of major medical claims than younger employees. Because an employer group health plan with older employees has more risk of medical insurance claims, the group health insurance premiums of the employer escalate.
A single major claim from any employee of any age can have a dramatic negative impact on rates. An employer that retains valuable older employees will therefore statistically have more claims, and will pay a considerably higher rate for their employee group medical premiums.
The employee benefits consultants at Group Benefits Advisors can assist Dallas Fort Worth area employers in devising a special Section 105 plan that will allow the employer to retain their retirement-eligible employees without this risk of raising premiums of their non-retirement age employee health benefit plans.
In fact, our employee benefits consultants can help Dallas Fort Worth area employers devise a plan that is a major win-win for both the employer and the retirement-eligible employee.
Within the special employee benefit plan documents that we develop for our clients, the employer can exclude these employees from their employee group medical plan. Our emploee benefits consultants can also show employers how they can set up a Medical Expense Reimbursement Account that specifies that any retirement age employee can be reimbursed for Medicare Part A and B on a pre-tax basis, and for a Medicare supplement plan on an aftertax basis.
The employee benefits plan document can also be set up to allow the employer to set aside in the reimbursement account any amount that they choose for age 65+ employees to reimburse for medical expenses or to pay for long term care insurance premiums.
This strategy has the following benefits for Dallas Fort Worth area employers:
- The employer can retain the valuable knowledge and experience by hiring post-retirement age employees.
- The employer avoids the rate increase that a single post-retirement age employee may have on the employer's group health insurance premiums.
- The employer avoids the rate increase that a single major medical claim experience from a post-retirement age employee could cause. This rate adjustment could be as much as 67% of the entire medical insurance premium for small employers in Texas.
This strategy has the following benefits to the post-retirement age employee:
- The opportunity to continue to work doing something that they truly enjoy doing, and the ability continue to save money for retirement, rather than draw retirement and funds at age 65.
- The opportunity to have a better health plan through medicare and a medicare supplement plan and at a lower cost than if they were part of their employer's group medical insurance plan.
- The opportunity to have a portion or all of their retirement medical expenses funded by their employer, including long term care.
- The opportunity to reduce income taxes by "trading taxable salary dollars for pre-tax medical expense dollars" with their employer.
- The opportunity to be able to collect social security by "trading taxable salary dollars for medical expense dollars with their employer" to the point that the salary they receive from their employer is below the limits allowable to collect social security payments. eligible.
For more information on how Dallas Fort Worth employers can implement a plan that will allow them to attract and retain valuable boomer retirement age employees but without increasing their employee benefits risk and costs, contact the employee benefits consultants today at Group Benefits Advisors today at (888) 398-6246, extension 120.
Filed under 401K, Consumer Driven Health Plans, Dallas Fort Worth Group Health Insurance, Employee Benefits Solutions, Group Benefits Advisors, Group Health Insurance Rate Texas, Group Health Insurance Texas, Health Insurance: Texas Small Group, Texas Group Health Insurance by on Apr 10th, 2007. Comment.
Thomas Quigley from Total Benefits Planning LLC utilizes a strategy that is heavily promoted by GroupBenefitsAdvisors.com. Mr. Quigley has been featured in Employee Benefit Advisor Magazine, the Dayton Daily News, the Cincinnati Enquirer, and the Cincinnati Business Courier. He co-authored a book, "How to Beat the High Cost of Health Care," that details his strategy, and is available at Amazon.com and other leading bookstores.
This proven strategy can save employers in Dallas Fort Worth and other areas of Texas on average $2,000 per year per employee, and lower their annual premium increases in future years without cutting the benefits to their employees. Imagine–a small business in the Dallas Fort Worth area with only fifty employees could save a half million dollars in premiums over a five yer period. The same "conventional" group health insurance plan has doubled in cost over the past five years, so the "spread" between what the insurance would otherwise cost is much larger.
This stragegy is based on a fifty year old federal law and is utilized today primarily by big companies, yet is generally misunderstood by accountants and lawyers, and generally not presented by health insurance agents as their commission income would drop by as much as 40% . If you are an employer, ask your agent why this strategy has not been presented to you, or contact Group Benefits Advisors today. As employee benefits consultants, we work hard for our clients, not for our commissions.
Please listen in to Mr. Tom Quigley's interview of March 20, 2007. Tom Quigley will be appearing in live seminars later this year in Texas. To get on the waiting list for Mr. Quigley's seminars in Texas, please join our newsletter list above, right.
[audio:TomQuigleyTotalBenefitsPlanning.mp3]
Dallas employers are tired and fed up, but they've come to expect double digit health insurance rate hikes each year.
If there is one thing we hear from practically everyone we talk to in the Dallas, Fort Worth Texas area, it is how much everyone–friends, employees, and employers– all expect a double digit annual group health insurance rate. Group health insurance rates have doubled in the last five years. Employers have cut back on the benefits they offer employees, and passed on more of the increase to employees.
Today the cost to insure a family in DFW with a group health insurance plan is often more than a mortgage payment. And as rates continue to go up, fewer employers can afford to offer group health insurance. Today, less than half of the working people walking around town have health insurance.
Dallas group health insurance brokers usually get the assignment to deliver the bad news of rate increases to their clients. They may check around a little to see if another insurance carrier is cheaper than the present one, but their main job is to go back to the employees at open enrollment period and help the employer explain why the group health insurance plan offered by the employer will cover less than last year and cost employees more than this year. Then they gather up the employee election forms and turn them in to the insurance company and get a pay hike, since they earn more commissions because of the rate hikes.
Sure, employers may switch from one insurance company to another to save a little bit every year or so. And insurance companies may increase the number of high deductible plans to lessen the blow to their customers, or blame the hospitals, lawyers and politicians for the rate increase. And hospitals and doctors may blame the insurance companies, lawyers and the politicians. (And of course, everyone blames the big drug companies.)
In the meantime, another year goes by, the rates go up, fewer employers can afford to offer their employees health benefits at work, and the number of uninsured in Dallas Fort Worth goes up. Group health brokers, of course, get paid on commission by the insurance companies, so even though they may not like delivering bad news, they get paid more as group health insurance rates go up.
Sensing a political issue that grabs headlines and votes, it seems that every state and federal political candidate has their own agenda right now on how the government can "fix" health care and health insurance costs. The thought of the governments in Austin and DC fixing anything is scary.
But a Dallas Fort Worth group health insurance broker has quietly introduced a solution that works for most Dallas Fort Worth employers and actually cuts group health insurance costs. This solution makes use in a new way of a neglected section of the IRS code that dates all the way back to 1955…
Filed under Consumer Driven Health Plans, Dallas Fort Worth Group Health Insurance, Employee Benefits Solutions, Group Benefits Advisors, Group Health Insurance Quote, Group Health Insurance Rate Texas, Group Health Insurance Texas, Health Insurance: Texas Small Group, Texas Group Health Insurance by on Feb 12th, 2007. Comment.
Greetings!
Group Benefits Advisors mission is to give Texas employers sound advice and affordable solutions on how to protect their bottom line from group health insurance rate inflation, and how to protect the employee benefits that they offer to attract and retain quality employees.
We will report on case studies and show how our strategies control costs, and without cutting the quality out of employee benefits.
We will also report and comment on the latest news items that impacts Dallas Fort Worth and Texas employers in the areas of health care and medical insurance and other employee benefits costs, as well as proposed federal and state government regulation. While politicians offer up sound bytes for new sweeping proposals to "cure" the cost of healthcare to gather votes, we can show clients in one hour how they can control their benefits costs today, right now, using existing insurance companies and plans and with no "help" from Washington or Austin.
Employers deserve solutions from their advisors to control costs. Employers know that cutting back employee benefits plans make it harder to attract and retain the quality employees that they need to grow profitably.
Group health and benefits brokers that routinely pass on rate increases or benefits cutbacks to their clients, and can only compare the rates from "insurance company A" with those from "insurance company B or C" add little value in today's inflationary health care environment. Even if these brokers knew how to help their clients control costs, there isn't much incentive for them to do so, since brokers earn more commission dollars thanks to their clients' cost inflation.
We believe that group health and employee benefits advisors should be compensated according to the value of the advice that they provide their clients. This gives employers a way to tie compensation to performance. As knowledgeable and clever employee benefits and group health insurance advisors, we can save Dallas Fort Worth and Texas employers tremendous amounts of money, often $1,000 per employee per year. And we will show how our strategies can reduce their yearly health insurance rate inflation, often with no impact on the quality of the benefits package offered to employees.
For more information, contact us today, and ask for a free consultation.