health insurance benefits employee percentages

Phil C

Can any one help me with any info on health benefits for employees as what percents the employee picks up etc

Thanks Phil C

Ken_8

Funny you should ask - today!

We do annual reviews on April 1st for the first full pay week of April. Today we gave each employee a review.

The renewal date for our health insurance is July 1.

Until this July 1, we have paid 100% of their health plans.

We advised each employee that they would be responsible for picking up any/all increases on July 1.

They all got decent raises. They all understood. They all agreed all their friends are already contributing something. They took no issue with the future "hit."

Since none of us knows what that "hit" will be, there is absolutely no sense in getting too worked up

yet.

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Bill_14

Switch???? Nah, I can't.....

Phil,

When your company gets hit with anywhere from 12% to 20% increases in premiums each insurance year, you gotta' decide just how generous you can be to your employees. It is really tough when you have done the same nice thing for years, but at some point you have to pull the plug on entitlements.

Heck, you might even have to switch to Flat Rate Pricing!!

Bill

Bill_14

Health Insurance

Health insurance is a great fringe benefit for both you and your employees. It is also an expense that has become very costly to a company depending on the employee and dependent population.

Every situation is different, but it comes down to a basic understanding of what health insurance does and does not do. Without lots of details, our philosophy is that health insurance protection is for catastrophic situations and should provide protection accordingly. Higher deductibles will help keep your costs down. In addition, we feel PPO coverage provides the best alternative, especially when specialty care is a factor. This option will increase your premiums. There are so many variables to consider.

Our company used to pay 100% of all health insurance premiums until these costs started getting out of hand in the 90’s. At some point we started looking at it differently and decided to split the premium expense. The first few years, we paid for 100% of the employee’s premiums and 50% of the dependent premiums. After about 5 years, we were forced to switch to 100% employee and 0% (actually it is 1% or 2%) dependents. We still provide 100% of the health insurance premium to the employee.

The company pays the entire monthly cost and we use payroll deductions for the employee’s dependent portion spread out over the monthly pay periods.

If I can help you further Phil, please feel free to email me direct at bill.russell@sbcglobal.net.

Joe Grosso

I have a Different View on This

The people that have responded to you so far I believe are alittle off base.I have a home heating oil company in metro nyc.I have always paid for my peoples health insurance 100 percent will always do so period.These people are my employees but are alsom like family to me.These men are the ones that help this business grow generate income for themselves and me.If your premiums go up at a dramtic rate shop.I have been able to keep the insurance bill from going up to quickly by doing this and believe me I do not believe anyone pays for insurance more than us lucky ones in nyc metro area.

Ken_8

Joe,

Each one of us has a "different view" but this fundamental truth remains: "There is no such thing as a free lunch"!

An over simplification suggests our gross sales numbers are like a huge eight-slice pizza. The entire pizza represents gross revenue. Let's assume two slices are consumed by the cost of goods sold, let's assume two more are for overhead. Let's also assume two slices go to profits and taxes. That leaves two slices for employees. One of those two slices goes to payroll. The remaining slice pays their bennies.

Employees get two slices. The size of each is irrelevant. Two slices is two slices, no matter where the line's drawn. This illustration is meant to imply that the two slices can appear in whatever form the employer chooses to present them. The reality is, the employer must make the two slices (and only two slices) appear as pallatable as possible. This is where the "art" of managing people and the appearance of adequate, fair compensation is spawned.

If you think providing 100% company provided health care is a sign of benevolence, think again.

Some years ago we asked our men how THEY wanted their two slices of pizza cut. When asked if they wanted large pay raises OR bennies; they unanimously responded: "$$$$$"

The point of all this pizza talk?

Before you pat your back with presumed benevolent intentions, see what the men really want!

It's tough to feed a family of four on "bennies."

Also, please explain how you deal with the pay vs. bennies pizza slices, when some employees are single, some are married, some have dependent children and some have families - making your contribution to each employee's coverage wildly inconsistent.

I applaud and absolutely agree with your intentions of caring for those who made you what you are today. Nothing makes a company "click" like honesty and true benevolence. Just make sure YOUR assumptions are shared by the very troops you wish to impose them on.



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Joe Grosso

Ken

I have asked my boys what they want as to bennys or pay.They do understand the value of medical as they all have wife and kids.I am not patting myself on the back but I do believe that my men should get both bennies and pay.They have since my grandfather started this business in 36.Adjust your hourly rate or in my case both hourly rate and price for fuel.Everything goes so go with the flow.Most of your customer will not say a word and the few that do explain to them the increase.Great employees are hard to come by treat them right all the way around and you will have a employee for life.All mine 10 years plus.

Ken_8

The greatest quandry of my

collegiate experience was the second year of business management. We got into the curve that exists with regard to profit margins and revenue.

An "X" vs. "Y" axis is drawn. One is revenue. The other is profit. The optimum point on these two factors is where we strive to be. Market forces suggest that if we give the product away and make little, the revenue will be maximized (at reduced profits). If we maximize profit, the revenue will fall off from non-competitive pricing (also reducing profits).

One cannot increase profits to pay bennies and great pay, without tampering with the "X' vs. "Y" relationships. If customers are lost due to comptetive forces, the revenue slides and the profits therefrom as well.

In a competitive free enterprise situation like yours and mine, one cannot do what you are suggesting, without debilitating consequences. Riding the absolute best possible curve point is what great businesses do and do so well.

Your suggested method of simply raisning rates has dire consequences. But then again, I never knew an employee who didn't want more pay (or bennies). How much is enough Joe? (obviously a rhetorical question)

When is everyone happy? Wish I knew. Don't we all?

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Jaitch

Health Insurance Issues

Employees at our firm pay fully for all coverage not on the employee (ie wife and kids). After three straight years of 20 to 50 percent raises in our premiums, we were forced to do so, however - speaking from personal experience - it's better than no health coverage at all. (Been there, done my time). One thing I would suggest if you decide to ask you employees to chip in, is that this be done at the pre-tax level. Costs that the employees pay for health coverage can be taken from the pre(federal) tax dollars to help reduce the adjusted gross income line on the 'ol 1040 form. Ask you accountant how to organize and maintain this deduction. I don't know what they call it today, but it useta be called a "Section 125" plan, and allows amounts that the employee pays in toward health care coverage to be tax free on the federal level.

Hope this helps - health care is a mess these days!

JOHN

PS

Jaitch,

I believe you are referring to what is called a "Cafeteria" plan (ie: Health insurance premium is deducted from gross income before taxes).

Dan Foley

Group Health

We pay 100% of the medical and dental premiums for our employees and their spouse/dependents. I feel that it is my responsibility as a business owner to offer my employees as well as their families decent health insurance. Who pays for this? My customers, of course. -DF

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Robert O'Connor_7

Bennies!

I'm with Dan F on this one. You gotta pay a living wage with full benefits or your guys are gonna walk. Isn't "It" what its all about? You take care of me & I'll take care of you. I'd rather have LESS to pay uncle sam and by providing these vital benefits to the men (and two ladies) comes right off the top anyhow.

Robert O'Connor/NJ

oil-2-4-6-gas

lets see if the place i worked at -(today --with gas prices,taxes,food etc.. all of our living expenses are going up--) and my pay goes down for any reason i have to leave--i have past a few offers to go to other companies for more money and sign on bonus less hours --i've been with the same company for 15 years --i am going to leave for other reasons but i would have a hard time staying in the company that cuts my benefits or pay in any way---your company is making money--instead of looking for the negative way to handle it --which will hurt you --find another way to make it up --clean up your shop and make it run efficient--

Tom_35

We went shopping

We had been with Blue Cross Blue Shield for the last 6 years on a PPO Plan. We had increases on all but 1 year. The quotes this year had another 35-45% increase, and we just couldn't accept it.

We got several other bids and went with another company, but we had to change medical clinics/doctors/hospitals. Still with a PPO, but we had to find new docs. We talked at length to our people about it and how much more money it would cost to stay where we were and they said it was fine with them to change.

We've paid 100% of the employee's health and life insurance, and also pay 100% on a long-term disability insurance policy. If they elect to add family insurance, the employee is responsible for it. I admire Dan in paying for the entire family insurance. Wonder how it is done when one person has no kids, another 6, another an older spouse with poor health. Obviously, the employee with the more liability is getting a much greater benefit from Dan than does the single employee.

Insurance is getting scary.

Tom A

Dan Foley

Premiums

Tom,

You make a good point with regards to the difference in premiums. I have young single techs whose premium is less than $150/mo. and I have older married techs with children whose premiums are closer to $1,000/mo. I factor this in when deciding on pay raises and bonus. -DF

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michael_15

Handling families vs. singles

What I've seen done at the company my wife works at is as follows:

You get paid $2000/month.

Your "benefit allowance" is another $200/month. The company covers the first $100 of your benefit costs, but your share increases depending on the coverage type. Single might cost $250, couple $300, family $400.

You can elect to either get benefits of the appropriate level, or refuse them and just keep the money. If you're single, you pay an extra $50/month, which means your paycheck becomes $2150 ($2000 plus $150 of unused benefit allowance). Families pay the extra $200/mmonth, so the paycheck is the "normal" $2000.

What this really means is that you're paying employees $2300 a month and having them cover their own healthcare less $100. If they don't participate at all, then they leave $100 on the table because they only get $2200 instead of $2300.

Why the leaving $100 on the table? In this case, the company is encouraging people not to go without healthcare, but at the same time cannot afford to cover all the costs. So to "not lose that $100", employees tend to opt into the healthcare plan. But if you've got duplicative healthcare from a spouse or something, what the heck, just take the $200 and pretend it's a monthly bonus.

-Michael