How Do Your Healthcare Benefits Stack Up? Benchmarking How Companies Pay for Employee and Family Cov

Originally posted 21st June 2013 by HCReform4SmallBiz

It's that time again for me in my day job, benefit renewals!

Every year we forecast or budget for a premium increase and think back over the year and all of the employee issues or family issues we know about (and fret and speculate over the ones we don't know about) and wait for our insurance broker to let us know how big the increase will be for us this year. Once the numbers are in, it is always a discussion on how much of the increase the company will absorb and how much of the costs we will have to pass on to our employees. This is especially difficult in a year where we know our employees have already seen a reduction in their take home pay because of the expiration of the payroll tax credit and for some workers an new added medicare tax on their income.

I spend a lot of time on the Kaiser Family Foundation website reading about their excellent research. I recently found a study from November 2012 that benchmarked employers and their costs of coverage and how they allocated the premiums paid to the insurance company between the employee and the employer. The study reports that "workers at private employers contribute 20% of the premium for single coverage and 30% of the premium for family coverage".

The Affordable Care Act outlines the requirements for providing healthcare coverage for your workers and their dependants starting in 2014. The rules require that employers cover 60% of the plan cost for employee and dependant Minimal Essential Coverage. For employers currently providing family coverage, these guidelines allow quite a bit of "cost shifting" of premium costs to employees based on these findings.

How do you allocate your health insurance premium costs today? Will you cost shift to employees based on the ACA guidelines? If you currently do not subsidize dependant coverage for your workers, have you done any calculations of the impact of the ACA on your premiums? Will you be able to make other adjustments in your worker's compensation to make up for the cost of providing health insurance for their dependants?