By Al Benson
National Employee Benefits Day was celebrated April 2 in the U.S. I had to look hard for any benefit trends that look encouraging for small business owners and individuals.
These are historic times for employee benefits in the U.S. as the Supreme Court hears arguments on the federal health reform law. For decades, health insurance, the most important employee benefit, has been highly regulated by the states, and now the federal government wants to take on far more regulatory power over health insurance.
Health insurance, while maybe not a right, is certainly a need for us all. But the fast increase in the cost of health care itself has priced most of us out of the market for traditional first-dollar medical coverage.
Working Americans look to our employers for help in meeting many of our life needs and for years employer-sponsored benefits programs have been critical to maintaining protections and security for ourselves and our families. Large employers offer significant financial support toward the cost of employee benefits, such as medical and dental coverage, basic life insurance and a match in a 401(k) plan.
But medical insurance plans with rich benefit designs are now so costly, they have become a luxury maintained only by major corporations, union-negotiated plans and government employers.
Start-up entrepreneurs and small business owners find it tough to pay for employee medical insurance. I hear this every day from small business owners I work with around the nation. Nowadays, to find affordable health insurance, most small businesses and individuals must self-insure thousands of dollars in health care each year by selecting a high-deductible medical insurance plan. Most, but not everyone, can afford these slimmed-down plans.
Instead, small employers have had to cut back on their contributions toward employee benefits, reduce employee hours to part-time status with no benefits and even terminate benefit plans. More small business owners have realized that maintaining costly group medical insurance for the benefit of employees and their dependents, particularly those with severe pre-existing medical conditions, may even be beyond the scope of what a small business can be expected to do.
For many, the workplace is becoming a place where employees are given opportunities to purchase voluntary benefits to meet their personal and family needs, cafeteria style, with no employer contribution to subsidize the cost.
Still, National Employee Benefits Day is a good time to take a step back and reflect on the often over-looked value of the employee benefits plans provided by employers.
If you are employed, it is a good time to remind yourself that your employee benefits are valuable. Take steps to increase your knowledge and understanding of the benefits that are available to you. Read the information your employer provides. Visit provider websites. Talk about employee benefits with colleagues and family. All of this will increase the value to you of the benefits provided by your employer.
Here are some health trends that seem to be going in the right direction for small business owners and individuals:
Federal and state tax preferences for people (not just large corporations) who buy health insurance and are willing to self-insure a portion of their health care expenses by selecting a higher deductible under a qualified Health Savings Account (HSA) medical insurance plan.
Proposals (not included in the federal reform law) to extend the same tax deductibility of health insurance to individuals that has existed for corporations under the tax code for decades, so people can buy portable, guaranteed renewable health insurance from major insurers across state boundaries. The federal health reform law provides hundreds of millions in funding for 50 separate intra-state exchanges. If we’re going to have exchanges, why not extend them nationally, across state lines, to provide truly significant market impact on access and price of health insurance through competition?
Proposals (not included in the federal reform law) for consumer-disclosed pricing of health care services, so we know in advance the actual cost of treatments we want covered under our health insurance.
State and federal programs to guarantee access to health care for people with pre-existing conditions, including health insurance for those who can pay and care subsidies for those who cannot pay.
Health insurance benefit designs focused on first-dollar coverage of preventive health care and the elimination of lifetime benefit ceilings.
More reliable government funding of health care for people who are indigent, uninsured working poor and unemployed.
Partnerships between health care providers and insurers to be more effective in providing medically needed care at the right time and in the right setting, with market negotiated pricing.
Use of more efficient administrative models by providers, insurers and government, including secure electronic patient records and programs to root out fraud and waste.
I plan to check back next year to see how these benefit trends actually play out for small business owners.
Al Benson, a Greenbank resident, has worked in the employee benefits field for over 25 years and currently manages a national private health insurance exchange under contract with U-Haul Corporation for its independent dealers, all small businesses, nationally. He is past president of both the Seattle and Phoenix chapters of the International Society of Certified Employee Benefits Specialists.