Integrators, How Are You Dealing With Health Care Insurance Costs?

I am sure at least some if not many here would be interested to know what kinds of solutions integrators have for the ever spiraling cost of healthcare in the US. Do you provide healthcare coverage for your employees? Do you have employee contribution or are you still covering the cost 100%? If you have contributions, are they based on a dollar amount or percentage of cost? Do you let them shop it around or do you provide it and they have no influence? Interested in the methods in play in our industry. Thanks.


Mark, good topic!

We are seeing health care insurance costs approach $2,000 per month for a family. It's pretty wild.

I am particular curious how integrators are handling it with lower paid employees. It's one thing to pay ~$25,000 a year to someone making $100,000 salary. It's another thing for a tech making $35,000...

We paid 75% of the employee cost for medical last year (employee portion only, not spouse or children). We just renewed the same plan with the same provider for a 19.7% increase. We decided to cover the additional costs. The employees pay the same as last year. We also pay for $50k in term life insurance for all employees. I will say that our broker worked his butt off and did all he could do in the market. The insurance market continues to get ever more expensive, tough! By the way, we have a 47-employee company, so are small group.

"We paid 75% of the employee cost for medical last year (employee portion only, not spouse or children)."

Shaun, that makes sense. One of the challenges is that if you cover health care for one employee's whole family vs another employee who is single, the former has essentially makes a lot more money than the former, everything else equal.

How do employees with multiple children handle paying that themselves? For example, if you are a tech and have 2 kids, that's likely a significant portion of one's pay, yes/no?

I believe the cost to the employee to provide health insurance for his/her entire family is around $880/month. That is certainly a large portion of their gross pay. That said, I have learned that good health insurance, though expensive when you are healthy, is very cheap if something catastrophic happens. My wife and I paid about $30K for $3.5M in services for our special needs child during his first three years of life. I'll take that trade any day.

Similar to Undisclosed 1 Manufacturer, we are on our last year of a grandfathered plan. We are going to have to exhaust all options next year. I appreciate everyone sharing their experiences. We will certainly consider the content in this thread when we go through the process next year.

Best of luck to you and your family Shaun.

Like everyone, we’ve seen our health insurance premiums go up over the past couple of years. We used to cover 100% of a very comprehensive plan for our full-time employees. Last year the rates sky rocketed and the plan we had been using for years was no longer available. So we picked out three plans from a different carrier, we told our employees we would cover the most basic plan (IMO the plan is garbage and still more expensive than the old plan) and if they wanted one like we had before they would need to pay the difference. Obviously this made everyone very upset, including myself. We have been dedicated to our employees for nearly 30 years and have always done our best to take care of them. Not we’re not able to anymore, it’s just too expensive.

I am there with you Mr. Bazyk. We are almost identical in what we have offered in the past, and what the reality is today.

In doing a significant amount of research about how to contain this a little, I would recommend you look into a Section 105 Healthcare Plan. It is a method to reimburse your employees for health care dollars, non-taxable to them, and allows them to shop for the best plan and the best rate on the open market, where believe it or not, they will probably beat the rates you can supply. That is what is happening when I look at details and plans. You supply XXX dollars per month, they take that money and shop. What they buy is their business. How much they pay is their business. They just have to buy something.

President Obama said that if I liked my health insurance plan, I could keep it. And I did, as it was grandfathered for the first two years. Now I am being forced to choose an ACA-compliant plan that costs nearly $10,000 more per year! My employer (a manufacturer) generously contributes $600 per month. However, this amount does not touch the increase. Even bumping down to bronze tier coverage will cost me $200 more per month.

Don't get me started! - We've paid 100% of employee for as long as we've been with a PEO. 20 years. You might check into a PEO..

Andrew, as health care costs have increased has that impacted overall compensation at all? Meaning if you still pay 100% of health care but that yearly amount per employee has say doubled, does that restrain salary increases?

I know it was meant for Andrew, but I will tell you yes it has. One employee healthcare cost is approximately 450/mo. Just theirs, not the family members. A 6% increase in premium is 27.00/mo or just over 300.00/year. It has to come from somewhere. If you pay all of the employees premium, and we always have, that cost just increased from 5400.00/year to 5700.00 per year per employee. It does not sound like much when you read that one employee's cost, but multiply that by 18 and see what you get. I already know that next year it that same coverage will cost at least over 6K per year. I have never seen the price go down, and the employees will be another year older. If I am lucky, the insurance company will not tinker with the deductibles. That is the best I can hope for.

In the past I have always been presented with two or three plans to choose from. That has always bothered me. No matter which plan I pick, half of my employees will wind up with coverage they don't need or want; or half will wind up loosing ground. This year we have chosen, for the first time ever, to involve the employee directly in the selection of the type of plan they receive. They get to make the decisions, not just me. Everyone has different interests and needs. Include them in the decision with a dollar limit as to what will be spent and let them have a voice. For small to mid-sized companies, the dollars are better spent, they have a say-so, I am not tortured, and believe it or not, we can contain the total cost. When empowered, employees will surprise you. There is an added benefit in that when they shop for a total family plan, they can actually purchase it cheaper. Their overall cost is cheaper. Seems backwards somehow, but that is what we have seen with our own eyes.

I liken insurance to business class air-fare or business class internet service. The provider charges more simply because they know they can (every other provider does it too so my options are limited), and it has always been that way. Businesses always seem to get charged a surcharge compared to individuals.

Everyone wants a raise and I would sincerely like to give it to them. Despite what government reports insist, the cost of living does increase every year. But if you want your healthcare provided, that cost has to be included in calculation of total compensation as a benefit.

It is easy to insist that cost of living is relatively flat if you don't include things like healthcare that always go up. Want a flat COL? Just leave healthcare out of the equation and viola.

Mark, good feedback.

I think it would be a lot better if healthcare was not connected to employment.

No, we are fortunate to have built our business on maintenance and support, and salaries have risen well above the average. However, prior to making that financial commitment to new employees, hiring more "green" part time employees makes sense.

Do you have a suggestion of a PEO to try?

Thanks

David,

I've been researching the same thing, but haven't pulled the trigger yet. Here is a list of companies to start your research, but ignore the rankings on this site. Toptenreviews is a good way to see who some of the big players are in an industry, but they take in cash from affiliate links from the sites they review.

I feel Marks pain, our average H/C costs jump to almost $1,700 monthly in 2016. Politics aside, we simply have to deal with what we have. Long ago I realized I wasn't interested in being a large business, but was more interested in be a very profitable business. (BURNT OUT TRYING TO BE BIG) We've outsources payroll/benefits to a POE for decades, outsource all cabling, and every client since 1995 has a maintenance support plan.

I've worked for two major non-Chinese Asian manufacturers over the past four years. I paid about $450/month at my last gig for myself and my entire family. My current employer covers all heath insurance at no cost to me whatsoever, but, being a large conglomerate, we own the insurance company. I worked for a few VC startups before that, and insurance was anywhere from $800 to $1500 a month.

How are deductibles impacting your plans? This NY Times article is saying that higher deductibles are a growing issue, especially under the new government marketplace. Evidently, there are many plans with deductibles of $3,000 or more.

My recollection is that most plans I have seen historically were small deductibles, say of $500 per year or so.