August 5, 2014

It Must Be True–My Insurance Provider Sent It To Me

By Paul Bieber

Actually, I trust my provider. It is Harvard Pilgrim Health Care, a non-profit insurer here in northern New England, created by Harvard University and insurance professionals. So, these pros send me a mailer describing the advantages of having good medical insurance for my employees.

They didn’t know that my employees are: me, myself and I. But it was a great flyer, and I want to share some of their thoughts with you, because however you provide medical insurance coverage for your employees, this will be an eye-opener.

They compared the costs of medical insurance of a company, any company, large or small, as looking like an iceberg. 25 percent of the costs are medical and pharmacy costs and 75 percent of the costs to you as the business owner are productivity costs. These include:

  • Increased overtime covering for people who call in sick
  • Inceased turnover from the stress level of covering for sick, fellow employees
  • Higher administrative costs managing your workforce on a reduced staffing level
  • Replacement training for new employees
  • Customer dissatisfaction by dealing with untrained personnel
  • Variable product quality created by inexperienced workers

If you have healthy workers, they take less time off from work. If you lower the stress level on your workers, they are more productive. If you have healthy workers, your disability insurances, your comp rate, and possibly your medical insurance, will cost less!

Let’s back these numbers up with some data with a direct quote:

“Studies have shown that as employees become healthier, they also become more productive, and companies with highly effective health and productivity programs have cost increases that are:

  • 5 times lower for sick leave
  • 4.5 times lower for long-term disability
  • 4 times lower for short-term disability
  • 3.5 times lower for general health coverage”

Healthy people work better. It sounds so simple. I know when I feel good, I can and do work harder. How about you? Aren’t your employees the same? If they get a prescription for antibiotic and get healthy they don’t come to work spreading their cold to everyone in the place.

I am not denying that medical costs for employees is one of the most burdensome things an employer can imagine. You feel so helpless and so over-matched. It is easier to throw your hands up in the air and just say you no longer give insurance, no matter what a penalty may be. Buying insurance for yourself and your employees may eat up 5-10 percent of your whole company’s expense budget, so don’t you think you should spend a little extra time to understand this expense and see how you can make it work for your company?

My thought… give your employees the best insurance program you can, and it will return your investment in spades. Keep your people healthy, they will work harder. Don’t let the good ones leave you because they get better insurance elsewhere. Hire better employees up-front because you have a good program.

Nobody pays 100 percent anymore (at least in our industry), but do ask your insurance provider to create programs for you that place you in the top 20 percent of companies in your marketplace. You’ll come out ahead in the long-run. I promise.

I also received a great email from explaining the medical events that are covered with no deductible or copay for everyone with insurance. If each employee took advantage of these free screenings and preventive opportunities, we would all be healthier and your company will run better too! Take a look at this, it is very interesting:

Stay healthy.