Health insurance

Wayco Wayne_2

however the question I was most interested in hearing an answer to was what your company policys are as far as who pays and how much percentage wise. A local HVAC company I have friends at are paid very well and the company buys all of their tools, however they are left to pay for the health insurance that the company gives them access to themselves. A supply house I frequent makes the employees pay it all also, but I'm not sure how well paid they are. I used to work for a company that paid half, but that was a long time ago. What are the predominant policys out there? WW

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Wayco Wayne_2

My newest Apprentice

has no health insurance. I want to take care of him but am curious at how your companys handle the extra cost. Some companys around here pay it for their employees and others make the employees pay. Of course there are others in the middle that split the cost in varying shades of percentage. An interesting side note is a Bill before Congress that will let associations band companys together to form a larger buying force and hopefully lower the price. I hope the congressmen do the right thing and are not unduly influenced by adverse lobbyists. WW

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Firedragon_4

I don't know where you

are but I belong to an association that's let me do that right now. In in MA and it's Associated Industries of MA. Better Business Bureau's also do this.

jackchips_2

I agree with

Firedragon about associations, Wayne. Check with your local BBB and they should be able to give you some leads. Most PHCC organizations are also good sources for this type of information.

As far as lobbyists are concerned, you can be one. Just find out who your Senators and Representative are in Congress and call their offices. Let them know what your position is and why.

Good luck.

Ken_8

Funny you should ask,

We just had a meeting. My five employees and I. I always let them know where the money goes and why. The topic was health insurance. We just renewed and got a better deal than simply renewing with last year's carrier.

I, a/k/a "the company," pay for their health care - 100%. When annual evaluations and raise time came back in April, I stated we were shopping for insurance and on June 1st, when we re-upped with a new health care provider, the actual costs would be passed onto the employee if the increase exceeded 10%. I also told them if it was less than a 5% raise in premiums, they would be entitled to the difference in their pay.

What I'm saying is we explain the wage and HC (health care) issues as merely a piece of the profit pie they are entitled to. If the HC costs runaway, their hourly wage will be offset by that amount. I slowly explained that their compensation percentage of the gross is somewhat static. That is how the allocation of income + bennies is derived, from money left over after all operating expenses are met - BEFORE I get a dime off the bottom line.

By them understanding the business P&L statement fundamentals, they also begin to realize there is no such thing as a "free lunch."

I flat out asked them, do you want bennies or money? They all agreed the plan was fair, after we discussed exactly how the compensaton, vacations, paid holidays, HC, taxes, and truck use impact the direct labor cost "nut", etc.

The answer then for us was, let the employees determine how they want their piece of the income pie to be divvied up.

After 30+ years in the biz, no one has gone off looking for greener pastures, and no one complains about the arrangement.

It is after all, of their own doing.

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jackchips_2

Hi Wayne,

I work for a medium sized plumbing company (80+ employees) and probably not a very good guide for what your after. The company pays 60% and employees 40% of the health insurance.

Hopefully more folks will give you a better feeling for what is out there for small companies.

Of coarse, you could also apply to join Ken's plan and take a couple more bucks out of his bottom line :-)).

Jack

Leo

In the northeast

In my area the northeast, oil companies pay from 75% to 100%. They also make the choice of what company they use.

Ken I like your style. I bet you manage the guys so the strengths are dwelled on and not the weakness's. Your sharpest guy I'm betting doesn't walk around knowing he is. Unfortunately I work for a good company but the fault is the sharpest guy is treated so, making the rest feel like they are the second team.

Leo

JaredM_3

Years ago

We used to pay 100% of the health premiums. When the costs started to spiral out of control a number of years ago we changed to 90%. The employees understand better now how much it costs and it has worked out well.

I like Ken's approach though, and will think about how we can implement something similar.

-Jared

Ken C.

Six of one, half-dozen of the other

Ken makes a good point. You must consider the whole package, not just the hourly wage. My perspective is as an employee. I recently switched jobs, and had two offers. Company A offered a high hourly rate, and would pay a partial premium on a single medical plan, with a three month waiting period. Company B offered an hourly rate that was $3 lower than Company A, but Company B would pay the entire health insurance premium, for both me and my wife, plus, coverage would start immediately (less than a month). When I factored in the cost of the insurance premium, Company B's total package pretty much equalled Company A's. That, plus the fact I could get coverage faster with Company B, led me to choose Company B. (Although I must admit, my ego was tempted by the higher hourly wage offered by Company A, but, you have to look at the whole picture.) I've worked for six companies, and the way they handled health insurance ran the gamut. Two offered no insurance at all, one paid partial premium for single plan only, one paid full premium for single plan only, and two paid full premium for family plan. Everyone knows that costs are out of control, and I wish legislators would do something about it, but Wayne, I would encourage you to pay the full cost of insurance for your apprentice. To me, that shows that an employer truly cares about an employee, and in return, the employee is likely to be more committed to that employer.

Wayco Wayne_2

Thanks for the replys

I'm impressed by Kens approach. You obviously have good management skills. If I were to follow your method I would have to grab better control and understanding of my finances. I'm working at it but it doesn't come naturally. I'm still working out in the field is a large problem and am often too tired to do the office thing. Experienced help is hard to find. For 3 years I had been training an apprentice but had to fire him this Spring just when he could have helped me let some work go. My wife just came out of retirement and is helping me again after an 8 year sabatical and boy is she a big help. I want to pay for the health insurance and probably will. I just wanted to see where I stand in the industry

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jackchips_2

Ken' system

is very similar to a cafeteria plan, Wayne. It was something, when I served on the Town Personnel Board, we instituted a while back.

You basically set how much your willing or can afford to give to the employees and they decide how to take it. This works well for folks who are under their spouses insurance plan. They can choose to take a different benefit from the company.

Do you have an accountant and insurance agent who can work with you putting together a total plan? The right people can be a great help in these areas.

One last thing, I hope the Mrs. is getting compensated for her contribution!!!!!!!

Glen

It depends -

we are just now looking at various packages for extended health/dental/life insurance. The average is about $3.50 hr (cdn) but does not include basic health insurance (another $54 - 108 month in B.C.)If our company pays the full meal deal then the preminiums become a taxable benefit - if we pay 50% then the tax payable is less. There are several construction associations and the local Chamber of Commerce that all offer packages. From a P&L standpoint - I think every employee should be able to have a vested interest in the program - and taylor the package to their family needs. It's a discussion that's not resolved here yet.

Dale

Insurance and taxes

Both Ken and Glen got me thinking about your issue. Unlike CN most benefits in the US aren't taxable to the employee. So a dollar in health ins is like $1.25 in pay if the guy is in a 25% tax bracket. The main thing is to like Ken explain the $ issues in an open manner. One thing to remember in the US is to follow the $. The benefits laws come about from lobbyists. So, there's probably a good tax reason to do what the big guys do. One of the best IMHO is the tax deferred benefit plan where the employee has UNTAXED money come out of the check for uncovered benefit costs or copays. It's the employees $ no match from the boss just the cost of making the deduct, it's a wonderful savings for people with kids in day care but sadly only available at the larger companies.

Wayco Wayne_2

Oh Yah!

We're paying Mama. (A;though her help is priceless) WW

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