August 26, 2014
With many companies now receiving their group health insurance renewals, more and more businesses are experiencing the sticker shock that industry insiders have been forecasting since the passing of the Affordable Care Act. And while some of these increases are on the modest side, just as many seem to be well beyond what business owners and HR managers were ever expecting.
The question now is, what can a company do when they can no longer afford to offer employee health insurance benefits? It starts with taking an honest look at the factors which are driving group premiums up. Here are a few of the most common causes of group health insurance premium increases.
Benefit-Rich Health Plans
We applaud companies who go out of their way to provide their employees with generous benefit plans. However, as noble a gesture as this is, it's also one of the leading factors associated with steep premium increases. The reasoning for this is simple: If you provide a plan with coverage that grossly exceeds the realistic needs of your group, chances are, employees will inevitably find ways to use the benefits; even in cases where they may be otherwise unnecessary. One of the best ways to reduce the amount of your renewal is to have an agent benchmark your current plan, to see where you may be over-insuring in comparison to your competitors in similar industries.
Excessive Health Claims
Of all the factors which contribute to increased group plan premiums, a history of excessive claims is one of the most significant. The major insurance carriers in plans written prior to January 2014, will look at a company's claim history to predict how much they will ultimately have to spend on reimbursement. If your business tends to see a large number of claims, it may be necessary to take a closer look at your plan type, deductible amounts and other important criteria, to ensure that your group plan is properly configured based on how your employees will be utilizing their benefits.
Companies comprised mostly of older employees are almost guaranteed to see an increase in their premiums. We're certainly not saying that you need to fire your staff and set off on a college campus recruiting bender. Rather, it will be adventageous to work with a health insurance broker who can help you adjust your plan to be more in line with the collective age of your group. This will allow you to still provide generous health benefits to older employees and upper management, while keeping premiums at an affordable level.
Before Automatically Renewing Your Group Health Plan
It's understandable to think that there's nothing you can do to avoid premium increases under the new system of Healthcare Reform, though that's just not the case. In fact, there are a number of ways to still able to offer solid health benefits without paying a small fortune. The first step is to contact an agent who knows exactly how to go about restructuring your plan in a manner that does not violate compliance requirements, while still meeting the needs of your staff.
At Premier, we specialize in helping businesses make the most of their employee health benefits. By evaluating each aspect of your existing policy, we can help you determine whether or not you're in the ideal plan for your company's needs, while identifying areas where you may be offering excessive or redundant coverage.
Contact Premier today at 800-369-0287 or get in touch by e-mail to schedule your free benchmark review, and avoid unnecessary rate increases in 2016.