Hey, kids! It's health insurance time!

There are two things that managers dread buying: a new copier, and health insurance. Everyone, from the CEO on down uses both, and someone is going to be unhappy with your decision. A medical practice has an ethical obligation to offer reasonable and affordable coverage to their employees – and shame to any who don’t (and I know a few!).

 

Healthcare companies buy health insurance coverage in the same market as everyone else. It’s expensive. It’s confusing. But it is, and most practices aren’t large enough to go self-insured. So what can you really do?

 

First, shop it. Get 2-3 leads of insurance agents who are active in the health insurance market and ask for quotes. They should ask you what kinds of coverage are important to you. Many states have mandates, so your choices may be limited.

 

Ask if there are options for insurer cost control efforts that will result in lower premiums. Disease management, where insurance company nurses will work with patients on actions that reduce hospitalizations and other bad outcomes, has gained traction with success. Diabetes is a major target.

 

Ask if investing in stop smoking and weight loss programs could impact the premiums, if not this year than in future years.

 

As you make your decision, brief your employees on the situation you face. They are well aware what employers are doing, and may be aware of the recent contracts at GM and Chrysler where retiree coverage has been offloaded to a union run trust. Share with your staff the full cost of insurance, and the percentage that they are being asked to pay. At a minimum, the employee contribution should be deducted from the paycheck using a Section 125, or “cafeteria” plan, which makes the deductions non-taxable for income tax purposes – and excluded from employer taxes, saving you a few dollars.

 

You can explore high deductible options where you can contribute a portion of the deductible, bringing it down to common levels for your employees. This may pay for you, particularly if you have a healthier workforce. This will require a bit of financial analysis, looking at what the actual expenditures have been by your staff.

 

Time to hold your nose and dive in. Good luck.