why exiting your group health plan and providing cash may be the right thing
DESCRIPTION
ACA (Obamacare) has unlocked new opportunities for small & medium-sized businesses to save money on health insurance. With these emerging models, both employers and employees can win.TRANSCRIPT
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Why exiting your group health plan and providing cash may be the right thing!
Brian Poger, CEO
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Hi,
I’m Brian, CEO of Benefitter
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© Benefitter Insurance Solutions, Inc. 2014
Employers have traditionally offered health insurance for two reasons
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Retain Employee
s
Attract Employees1 2
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Since WWII, employer sponsored insurance has stayed largely the same…
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…even as our world has changed around us
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until now
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The Affordable Care Act (ACA) created two profound market changes that affect how all companies look at health coverage.
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First, it created a market for insurance where anyone, healthy or sick can get covered
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Second, it provided federal subsidies to help about 70% of the population buy insurance
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These subsidies can be
enormous
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A family of four spends on average $16,000 per year on health insurance
Group Health Insurance
$16K
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Subsidized Individual Insurance
$7K
With subsidies, their total cost can be reduced to $7,000 per year, or less.
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But there’s a catch (of course)
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=Group Health Insurance
Employees who qualify for group health insurance cannot access these subsidized plans
Subsidies
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So for employers, the only way to help your workers access subsidies, is to stop offering group insurance
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Counter-intuitive? Yes.
Dropping group coverage is in some cases the only way to “do right” by your employees.
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These rules might make you feel like you’re stuck between a rock and a hard place…
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But we’ve already seen some companies take action.Several Fortune 500s have reduced their benefits and moved employees to the exchange.
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By 2025, “fewer than 20 percent of workers …will receive … employer-sponsored health insurance”
- Zeke EmanuelWhy employers will stop offering insuranceMarch 2014
And soon, more may follow….
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Drop Coverag
e?Employee Impact?
Employer Impact?
For the average employer or broker, determining the appropriate course of action is no easy task
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Subsidies are based on income.So by dropping group coverage, some employees will come out ahead, while others will come out behind.
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But savvy employers who recognize this can provide extra compensation to make it fair for all employees.
Extra post-tax
compensation
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To do this right, you must account for:
• Individual market rates
• Plan design
• Post-tax employer contributions
• Government subsidies for exchange plans
• Employer mandate penalties
• Payroll tax
• Other tax effects
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Sound complicated?
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We make it simple
Good news…
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© Benefitter Insurance Solutions, Inc. 2014
With Benefitter Advisor, brokers can guide their clients to easily compare the costs of group vs individual health insurance.
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We take into account the detailed makeup of an employee population, to predict the net effect of federal subsidies
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We predict the value of subsidies that will be available, based on employee income and household size (using estimates that can be refined)
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And using an employee-lens, we develop an approach to adjusting compensation in a smart, individualized manner
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We’re entering a whole new world of health Benefits. I invite you to learn more by clicking the link below.
Click to learn more
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© Benefitter Insurance Solutions, Inc. 2014
Brian Poger, [email protected]
www.benefitter.com@benefitterHQ