When it comes to keeping rising health costs at bay, employers essentially have three choices: change carriers, change coverage or change (i.e., increase) workers’ contributions.
Because the little guys are negotiating with small risk pools, they’re hit especially hard by increases.
That means many small firms are left with little choice but to pass along more of the cost burden to employees. Here are morale-saving ways to do it:
Good for high-earners, but …
Offering and partially funding tax-advantaged accounts like HSAs, HRAs and FSAs can go a long way toward helping workers with out-of-pocket costs and high deductibles.
But there are plenty of obstacles. Example: High-deductible plans coupled with HSAs and HRAs tend to go over well with high-earners.
Low-earners, however, tend to balk at fully funding tax-advantaged accounts, which can leave them in the lurch when a major medical event takes place.
To prevent this, show folks exactly how much they can save in taxes. Example: If you fully fund an FSA ($2,550 for ’15) and spend that amount, you’re saving $800 or $900.
3 unique takes on cost-sharing
Creativity is another way to make cost-sharing more bearable for staff.
According to Roger Howell of Howell Benefit Services, there are plenty of non-traditional approaches to cost-sharing that can benefit both employers and employees, such as:
- The self-funding approach: Some employers will make workers
self-fund a portion of the deductible and they cover all costs (co-pays or co-insurance) beyond it.
- The split approach: Howell sees some employers offering a 50/50 or 80/20 split of deductible costs.
- A three-tier approach: Here an employee may be responsible for the first $500, the company for the next $1,500 and, beyond that, staff will cover any additional expenses.