January 21, 2014

Let’s Reduce Your Medical Insurance Costs

By Paul Bieber

Pick the best options:

  1. Replace every employee with two part-timers.
  2. Send all new hires for a pre-employment physical.
  3. Only hire young, single people so you won’t have any family insurance.
  4. Hire military retirees who get government-paid insurance.
  5. Hire only folks over 65 so they can use their Medicare.
  6. Look into joining a larger group plan through a local business organization, such as a Chamber of Commerce.
  7. Always hire the wife or husband of your key employees so that one family plan covers both.
  8. Reduce the load on your insurance by verifying who actually is eligible from each covered family.
  9. Spend hours and hours figuring out the Affordable Care Act and still not get it.
  10. Call your insurance broker and get a simple plan that will work for you.

Now for the answers.  Take each and every one of the even numbers.  Let’s look at them.

Number 2:  Set up standards for what your employees need to do (for instance, be able to lift 60 pounds; stand on their feet for two hours at a time; work with their arms over their heads for ten minutes; or be able to walk at least 100 yards carrying 40 pounds).  After you have decided to hire someone, make the offer conditional on passing a pre-employment physical.  This will probably cost you $75 to $150 dollars per person.  But you will find out if someone is fit for the job you have.  If a person can’t pass, he may become a workers’ comp case or a medical insurance case; either way costs you.  Yes, some people will pass the test who will get sick or hurt on the job; the test is not 100 percent predicative, but it will save you in the long run.

Number 4:  A 45-year-old person who has 20 years in the armed forces is one of the best employees you can hire, under any circumstance.  He understands how to take and give assignments; understands respect, both up and down the ladder; is self-disciplined and unusually skillful in his specialties; and yes, he has medical insurance for life.  If you offer medical insurance to your employees, you can’t skip offering it to military retirees, but you can encourage them to use the military insurance and not yours by offering a small payment in lieu of taking your insurance.  If your company is in an area with a military or VA hospital nearby, this will be a winner for you.

Number 6:  Spend some time on this.  Look into local civic groups that offer membership along with health insurance group affiliation.  Not all states allow this so check with your broker.  Call other small companies that you deal with and ask them where they get their health insurance.  Go to your state’s website, search for small business information and you will probably find insurance info. 

Number 8:  Some people in your company may list extra people on their family medical insurance.  Maybe a niece or nephew with the same last name; maybe a friend’s child.  Most often, these folks need the insurance because of current medical conditions.  Ask all employees to bring in birth certificates or marriage licenses for all people on your insurance plan.  Yes, this sounds like you are saying you don’t trust your employees.  When we did this at our 250-person company, we eliminated about 5 percent of the people on our insurance roles, which saved us major dollars.  Unsure on this one? Ask your broker for help.

Number 10: I am willing to bet that you are really good at the glass and metal business.  You have survived this long in what has been a very rough five years of the economy.  You may even be pretty sharp in another part of life … maybe you know every baseball batting average for your favorite team.  But you don’t know insurance.  You should have a basic understanding of comp and liability, but the insurance market for employee health has been turned on its head this past year.  Rely on the help of a professional.  Don’t invest your time on this.  Listen to the people that know and follow their advice.  Spend your time on the glass business.

The best plan of all is to set up an incentive to get people to drop your insurance if a spouse has coverage.  I’ll give you an outline for this next week.