Employee contribution rates for health insurance plans

Dawn Dennie · August 2001

I was hoping that you could lend some insight on small employer benefits by providing detailed information on how much employers are charging their employees for health insurance coverage. Thanks in advance for your reply.

PMI · August 2001

We have 73 employees (65 full time). Employees with single coverage pay 20%, and employees with EE + 1 and Family coverage pay 40%. Our goal is to bring all employees to a 25% contribution rate. We'll probably get there within another 2 to 3 years.

js · August 2001

I wish it were different, but...
We pay $95.00 a month towards each employee's
insurance-- regardless of what level of coverage they have opted.
Employees are stuck with any where from $154 a month to $658 a month.

We are a sewing industry just happy to be open and providing jobs. We
are the only one left in our area.

bsa · August 2001

My company pays approximately 84% of non-exempt employee coverage, 100% for exempt. The employee pays 100% of any dependent coverage. With insurance steadily rising, I expect we will have to change with our next plan year.

tom · August 2001

We too are in the process of reviewing our medical contribution rates. We are a large employer with approx. 1ooo covered employees. At present we cover, 80% of our employees who have chosen "family" coverage. For individual coverage, we pay 76 % of the coverage premium. We are charging our employees $22/wk for family coverage and $13/wk. for individual coverage.
How does this stack up to others?
Thanks- Tom

Anita · August 2001

We are a company of about 100 employees. We have 2 different insurance choices and 3 different types of coverage.

The base plan (HMO) is $25.00 for employee the buy-up plan is $45.00 for employee

base plan for employee + child(ren) or employee + spouse is $75.00 $125.00 for the buy up

base plan for family is $125.00 and for the buy up its $170.00

We divide the payments into 2 and take them out of the 1st 2 paydays in a month (we pay bi-weekly)most employees understand the reason behind the partial contributions, and some are happy because they are low compared to some other places and then our old time employees are unhappy because they have to pay anything at all.

franfields · August 2001

We have about 105 employees. We pay $150 per month towards health and 50% towards dental coverage in one office. In our other office, we pay $200 toward health and 50% toward dental. The difference in that we pay for parking in the one office that is in a downtown location while the second office has a parking lot for the employees that does not cost us anything.

We are expecting a 40% rate increase in our health insurance October 1 and will not be increasing our portion.

cedupree · August 2001

We are a small company with 22 employees. For the first time, our employees have have had to contribute to paying the premium. Each employee pays 11.5% for the monthly premium. We are looking to raise this percentage next July at renewal time but am unsure at what percent. The employee pays 100% for any additional coverage for spouse and / or children.

Watson · September 2001

Have any of you that pay more towards your employees with family coverage than you do for your single employees' coverage ever had a discrimination claim for bias towards married employees?

Gillian · August 2001

[font size="1" color="#FF0000"]LAST EDITED ON 08-28-01 AT 10:35AM (CST)[/font][p]The responses confirm that our health insurance system is broken. Increased contributions can't be loaded on employees forever - where will be the breaking point where employees will elect not to have insurance at all? Then the already high percentage of uninsured citizens will even be higher. Mandating that the employer pick up all the increased costs isn't realistic either. There aren't any answers to this dilemma, yet. We will find it, however, in the next 10 years or so because, politically, it will become a major hot potato and Congress will find the will to deal with the problem.

Here's where we are. We pay 100% of employee premiums and have just started picking up some of the dependent costs. We found that our competition for employees pay, on average, 60% of dependent coverage. We can't reach that level in one whack so have started picking up the increases in coverage. The upcoming round of increases will be the second time. Our goal is to reach 50% employer contribution towards dependent coverage. We have other benefits that are better than the competition so slightly lower than the competition is OK in the insurance area.

I don't think that you will find any trends, other than by industry and employer size. Overall, employers are all over the map pertaining to contributions. In my mind, the most important consideration is what your competition for employees is doing. Where are your new employees most likely to come from and what employers are they most likely to go to. You must compete with this group. If the benefits are lower then you are forced to pay higher wages to compensate. The other alternative, of course, is to do neither and accept a higher rate of turnover.

drunkle · August 2001

We're a small 50 employee company in the heart of SF. We pay 70% of the premium for health and dental, and 100% of vision. But the plans the company has are not providing the coverage we would like, so we are shopping. When we expand the coverage we will probably have to re-evaluate how much we pay for as the premiums will go way up.

cedupree · August 2001

Yes, we went shopping too, but when they did the health surveys and examined the past year's health history of the employees we had to remain with our current insurance carrier, which is a great carrier.

drunkle · August 2001

Who do you use? We are currently on BlueShield CA PPO, Pacificare Dental, and EyeMed Vision, and I would change all of them if I could.

Gillian · August 2001

We are also in CA. We use Health Net HMO and POS. Health Net includes vision. Delta Dental for dental. We also offer Kaiser HMO.

Be careful of changing unless there is a major reason to do so because the disruption to employees and their relationships to their doctors creates all sorts of morale problems. We went through that recently because some physician group providers had financial problems and our previous carrier dropped them. Further, given our current state of affairs re. health care its hard to NOT have problems.

cedupree · August 2001

We have Blue Cross Blue Shield (Blue Preferred) for health (employee pays $390 per year), Guardian for dental (company pays 100% of dental) and Security Mutual for disability and life (employee pays $120 per year for life, company pays 100% disability) and SunLife for additional life (company pays 100%) The employees weren't happy about paying for the health insurance since they had never paid any portion before, but they realize there is no where else they could go and get super coverage for $390 per year.

cedupree · August 2001

Forgot to add that vision is included in our BCBS plan. You may want to check with with your broker at renewal time to see if this an option for you under the rider category.

SandraJ · September 2001

Please give me more info as to why you would change them all. I was considering changing to the blues and getting vision insurance.

jechiplock · September 2001

We have 700 enrolled in our self-insured, single-option (PPO) health plan, split about two-thirds in family and one-third in single coverage. Company pays about 70% of gross medical costs (including vision) on average for both groups. Dental is 100% participant-paid. Premiums are $14 single and $40 family biweekly ($26/$63 with dental added). Average annual gross cost to company per participant is $3000 (our target level, but getting harder to maintain). A lot of cost gets added for administrative fees paid to our TPA, as we do not have a large HR/Benefits staff in-house to handle. We have increased premiums, co-pays and in-and-out-of network deductibles in each of the last three years, and may have to do so again for 2002, but fear creating sticker shock and wage pressure. We will likely get creative with how we apply cost increases, i.e. using bifurcated premium schedule which grandfathers current participants at lower premiums but imposes higher premiums (and perhaps also co-pays/deductibles) on newcomers, mandates use of generic drugs when available or caps payment for DAW's, allows participant cost for generics to apply against in-network deductibles, and pays higher company percentage toward employee's coverage than toward dependents'. Wishing you good luck and good health - we're all gonna need it!

Frenchie · September 2001

We have 77 associates and are partially self-funded. Prior to this contract year we paid 100% of the premiums for both family and single coverage. This year, we are looking at a 30% increase, therefore associates with family coverage are going to have to pay a small portion (11%) of the premium. We are also considering changing our deductible and co-pay amounts, currently at 200/400 deductible and 4,000/8,000 on co-pay, to 300/600 and 9,000/18,000. We are fully self-funded on dental and vision with no premium cost to associates.

dhnyct · September 2001

Our plans appear to be about average. However, employee deductions are made with pretax dollars.

As for changing insurance companies, there are constant offers with teaser rates. We have changed a couple of times, but within 2-3 years we're facing the same high rate increases.

We're currently looking into AFLAC for supplemental coverage. They offer several products, also pretax dollars, and employees can choose what is important to their personal situations. With the Wellness Benefit, employees can actually recover a portion of the premiums. Anyone out there have experience to share...pro or con???

franfields · September 2001

We have Aflac Cancer/Specified Disease/ICU available as supplemental insurance. We recently lost an employee to lung cancer and the policy has helped the family tremendously with quick, no-stress claim processing. Also, as you stated, the wellness benefit helps to offset the premiums which, by the way, do not increase the way other premiums do. My own policy was grandfathered in to our group and my rate has not changed in over 5 years.

PMI · September 2001

We've been using AFLAC for the past year and it's worked out well. Be VERY CAREFULL in selecting your sales rep, however. They give the term "hard sell" a whole new meaning. It's wise to sit in on all of the employee presentations to make sure the rep is behaving himself (or herself). I came close to tossing our AFLAC rep right out the door because he was overselling -- for instance, he kept speaking about the cancer plan as though it was an investment vehicle, and he had the gall to say that it's OK & routine to lie about the nature of certain claims in order to get the maximum benefit. He explained, in front of a group of insurance underwriters & my senior management team, that an employee can collect on a disability/accident claim even if the injury occurred as the result of doing an activity expressly forbidden by the plan, such as sky diving--to collect, the employee would simply need to lie about how the accident occurred ("nobody ever actually checks," he said).

CuriousG · September 2001

>We've been using AFLAC for the past year and it's worked out well. Be
>VERY CAREFULL in selecting your sales rep, however. They give the
>term "hard sell" a whole new meaning. It's wise to sit in on all of
>the employee presentations to make sure the rep is behaving himself
>(or herself). I came close to tossing our AFLAC rep right out the
>door because he was overselling -- for instance, he kept speaking
>about the cancer plan as though it was an investment vehicle, and he
>had the gall to say that it's OK & routine to lie about the nature of
>certain claims in order to get the maximum benefit. He explained, in
>front of a group of insurance underwriters & my senior management
>team, that an employee can collect on a disability/accident claim even
>if the injury occurred as the result of doing an activity expressly
>forbidden by the plan, such as sky diving--to collect, the employee
>would simply need to lie about how the accident occurred ("nobody ever
>actually checks," he said).

It sounds to me like you need to report this AFLAC rep to the company. I am sure they would be relieved to relieve you of having to deal with him or her.

My own experiences with AFLAC have been pretty good. I agree that you need to be careful when you select the AFLAC rep who will be dealing with your employees. Be sure that they can identify with your employee group and their real needs, and will do only needs based selling.

Also, think twice about adopting their free Section 125 plan. In many cases you do not need this, if you already haev a 125 plan through your Health Insurer. You would need to amend the existing plan to include the AFLAC coverages you offer, but it would be less confusing to you than filing two 5500 reports each year.

Terri · October 2001

We have a Section 125 through AFLAC for catatrophic coverage (cancer, etc.) and intensive care. Some of our employees have had the misfortune of using this coverage and have been completely satisfied with AFLAC's response. I wasn't aware that they offered a health insurance program and will look into this.

Our employees pay $65.00/month for family, $45.00 for employee with children and $25.00/month for employee only. This will go up to an undetermined amount come Jan. 1, 2002.

keithlf · September 2001

Dawn, we charge the employee 30% of the total cost of the medical insurance and life insurance. This is for everyone including salary employees.

Car · November 2001

We have a staff of 65 employees. We pay 100% of employee premiums and 80% of dependent premiums. This has been a great recruiting and retention tool for us.

Nick · November 2001

Our employees contribute 30% towards their Medical and RX. We have a strong wellness program to attempt to 1. Help employees reduce their 30% contribution and 2. To encourage, by positive reinforcement, the employees to take an active role in monitoring and improving their own health. We have a annual wellness fair and the employees and their spouses are elegible to participate. The participants receive monatary credit to be applied towards their premium for participation in blood pressure, height and weight, glucose, cholesterol. They can receive full credit for testing within the guidlines set forth by our medical providers for the aformentioned areas and for not using tobacco products. We also have partial credit if the participants fall in a range that is just outside the full credit limits. Tobacco products and height and weight do not have partial credit limits. Employees who opt-out of the medical and Rx program receive their credits in their pay. This program has been in effect and evolving for the last six years. Our health care utilization numbers have decreased so this effects the premium and contributions positively. Employees can earn up to $40.00 per month and spouses $23.50 so the impact on their monthly medical and Rx contributions can be significant. This year we had 90% participation in the wellness program. Every year the participation increases but some employees still believe that we are offering this program to obtain medical information. We provide education on the HIPAA laws and we show them an example of the spreadsheet report that the provider sends us that states the employee's name and lists each wellness area as pass, partial or no.

keithlf · November 2001

We charge our employees 30% of the cost of the insurance. Ours insurance is a PPO plan and is rather inexpensive.

Mikki H · November 2001

We have always paid 100% of employee premium and the employee is responsible for any dependant coverage premiums. In order to keep costs down with rising premiums we have thought of charging the employee a portion of their premium, however we have not found a good formula. We have been warned to be cautious that we do not discriminate against older employees, but have not actually been told a good formula to use. I see that some use a percent and some use a flat dollar. It seems that the flat dollar would be more discriminatory since the younger employees might get their full premiums paid, while the older ones will have a cost. The percent method seems more fair across the board. Although we hate to charge the employee, with experiencing an average 27% rate increase in the coming year, we feel that it just might be necessary. There are many employees who are already covered under a spouses plan but take our coverage because it is free to them. Since we do not offer an "exchange" of benefits, it doesn't make sense for them to refuse coverage, but that costs us a lot to cover people already covered. This might discourage some people from taking the coverage.

Employee contribution rates for health insurance plans

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