Offering benefits to employees is a necessary part of staying competitive and encouraging employee retention. A 2017 report on employee benefits by the Society for Human Resources Management (SHRM) found that the number two reason employees leave a workplace after seeking better pay, is for better benefits.
Additionally, the individual market for health insurance since the passage of the Affordable Care Act has become “a field of land mines,” says Adam Hyers, owner and president of Hyers and Associates, Inc., a Columbus, Ohio-based independent insurance agency that works with numerous healthcare providers across the country. “It’s a fool’s errand to send your employees out on the individual market where the networks are very restrictive and the costs are very high.”
However, every practice has to find the right balance of offered benefits to keep a healthy margin. The 2017 Kaiser Family Foundation Employer Health Benefits Survey showed that on average, organizations offering health benefits paid as much as $5,900 per year per individual covered, and $13,400 for family coverage. These costs add up in practices with numerous employees.
Experts suggest practices review their benefits annually and survey employees before making any major changes to benefits, but to also be proactive in seeking opportunities for cost savings.
Cost saving options
In the current health insurance landscape, in which the Trump administration has been seeking legal workarounds to the Affordable Care Act in lieu of a failed repeal, it may be especially useful to review benefits more than once a year, says Arthur Tacchino, JD, chief innovation officer at Sync Stream Solutions, a New Orleans, La.-based consulting firm that helps employers understand and manage health benefits.
“Things are always changing, so re-evaluating benefits is a really good idea because a better option might have come along or have been created that [employers] might not be aware of,” he says
However, physicians and practice administrators need to be aware that some new options may not be as good as advertised. One such area, billed as cheaper for employers and individuals, are short-term or “mini” medical plans, which might only cover an individual for three months to 12 months, Tacchino explains.
Jonathan Gruber, PhD, professor of economics at MIT, in Cambridge, Mass., who has expertise in employee benefits, calls these plans “terrible.
“They’re not real insurance,” he warns. “Some people are going to be fooled into thinking they have insurance when they don’t, and it will pull healthy people out of the pool and raise the premiums for everyone else.”
Additionally, while not new, multiple employer welfare arrangements, which allow smaller practices to band together and buy health insurance as a larger group, are becoming more popular in the face of the high cost of steeper health insurance costs, according to Ty Reid, director of worksite benefits with the O’Neill Group, an insurance broker of employee benefits, in Wadsworth, Ohio.
“Smaller practices are starting to contract healthcare in the way much larger organizations do through risk sharing agreements,” Reid explains.
Gruber feels the most effective way that physicians can save money is to be “more aggressive in shopping across insurers.” He sees employers saving a lot of money by narrowing the networks of the plans they offer to their employees. “Employers don’t need to cut benefits, just cut out high priced providers that aren’t much better than any other providers,” he says.
He says it’s common for physicians to see a name they’re familiar with, such as Blue Cross, and sign up purely because of the name recognition, “but they don’t shop around or realize there are better options out there. It’s worth a day and a half to sit down and shop the options,” he insists.