A competitive employee benefits program is essential to acquire and maintain key talent, but the cost to do so with traditional healthcare programs can wreak havoc with the bottom line. After all, group healthcare costs are the largest obligation many employers have outside of payroll. Small business owners and human resources managers need to find innovative ways to tackle this problem, as controlling healthcare spend is crucial for their long-term growth and success.
Traditional health insurance carriers offer one-size-fits-all medical plans that provide a large selection of services most people never use. The carriers have no incentive to offer more affordable services and they increase rates year after year without justification. Because of this, many frustrated employers have bucked tradition and said goodbye to the big carriers. However, there are still many small companies that haven’t yet taken the leap. Huge companies with lots of employees have found success operating and financing their own health plans. They simply pay out-of-pocket for medical expenses as they are received. This manner of self funding can return great rewards, but it can also leave a business exposed in a high claims year; claims still have to be paid even if there are more than expected.
Level funding is a unique alternative. It offers money-saving benefits and flexibility with managed risk. Reputable, privately-held administrators take care of all the details and provide more customization, transparency and cost savings than traditional carriers. This can help employers achieve their financial goals while still providing meaningful benefits to employees. In fact, many level-funded plans boost employee participation rates, resulting in better health all around.
Nobody likes to talk about rising healthcare costs. Premiums for employer health plans continue to grow year after year. Individuals and families struggle to pay for quality medical plans on their own and the burgeoning expense can make or break a small business when it tries to shoulder the burden.
Employers and human resources managers have their work cut out for them. In a strong economy with unemployment rates at all-time lows, it has become harder and harder to recruit and retain key talent without robust health benefits packages. A recent study by Fractl found that when choosing between a high-paying job and a lower-paying one with better benefits, 88 percent of respondents said health, dental and vision insurance might tip them toward the latter.2
But there’s a hefty price to pay for employers who want to attract the best. Group healthcare costs are the largest obligation many employers have outside of payroll. Finding innovative ways to control these costs is crucial to their growth and long-term success.
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