October 8, 2019

Now Is the Time to Shop for Next Year’s Health Insurance

By Paul Bieber

Your employees are what makes your company better than your competitors. So, what keeps your employees happy at your company rather than jumping to another? It isn’t wages. If you increase your wages by a buck an hour, someone else will go up a buck and a quarter. Work environment is so important, but we will cover that issue another day. Which leaves us with employee benefits, which can be split into two broad categories:

  • Time benefits, covering amounts of vacation, days off for holidays and personal time.
  • Non-cash benefits, the most important of which is health insurance.

In my experiences, health insurance is, by far, the most important part of a benefits package. I have consulted with many companies where employee turnover is high. The owners have asked me to help figure this out. After spending a day speaking with a half-dozen current or former folks, health insurance was key in their decision making about staying with or leaving their company on every single consultation.

You want to hire and retain a family-person who has roots in your community. Nothing says this better than good health insurance. On average, good family coverage will cost between eight and ten thousand dollars; single insurance will be around three thousand. Giving a dollar an hour raise will cost you, with taxes, worker’s comp and overtime figured in, about three thousand dollars. If you spent this amount next year on better health insurance, your employees will love you.

You should pay at least 75% of the cost for an employee’s insurance, single, married plus one or full family. Keep the deductible low, no higher than five hundred per year for the full family, not per person. Don’t place a maximum per person. If someone gets cancer and their insurance runs out at one hundred thousand, and they have to declare bankruptcy, your whole company will be upset, which causes turnover. Keep it simple, they should not have to see specific doctors. Let each person choose their own provider. Make sure mental health is treated the same as a physical ailment. Get a plan with the least amount of paperwork for the family. Avoid plans where the employee has to pay the cost of a medical visit and then get reimbursed. You can exclude some types of claims, for instance, voluntary plastic surgery is usually not covered. Go over these options with your agent.

Give good dental insurance, making sure that children’s braces are covered. There is usually a limit on dental plans. Go at least twenty-five hundred per person, per year. Give two hundred per year for glasses and five hundred per year for hearing loss needs.

All this being said, great benefits will not turn a lazy person into Superman. Don’t keep a bad worker or an up-setter of your work place. And when you go to rehire, stress how great your insurance plans are. This will help you hire a top-tier person.