Employee contributions for health insurance - moving from an 80/20 to a flat dollar amount
jbduffy
9 Posts
Due to constant increasing health insurance costs, after 30 years we are reviewing our current plan design for how we contribute to the costs for our EE health care coverage. For 30 years we have been covering 80% of premiums for all family sizes. We are considering a flat dollar amount per EE so that we can begin to control costs and shift the constant annual increases to the EE. If your organization also has a flat dollar amount contribution limit, could you please advise what you contribute to medical insurance costs per month per EE. We are a small-mid size 60 EE sales service rep agency organization in PA.
Comments
Let's suppose single coverage is currently $400, and family is $900, monthly. Would you set a flat rate at $400, leaving $500 for the employee to pick up?
Maybe I'm confused on this concept, so I'll stop. It just doesn't sound too good to me.
Now that I am thinking about it some more... that doesn't sound fair either. Maybe we need to consider 80% of EE cost only and then 50% for dependents with no max. or 80% to a not to exceed $ amt that is different for each family size. Currently we pay $670 for a family in one state and as high as $1100 in another. Singles range from $220-500. Currently we spend an any of $500/EE per month. What I have found is that since we pay 80% of premium for dependents and 80% for all increases on those same dependents, our EE don't often think about trying to move dependents off in situations where those same dependents have coverage elsewhere. Despite the huge costs for insurance, I still have EE with spouses and dependents w/double coverage.
I posted the question to see what other companies my size are doing.
55% for family ('ee, spouse, children)
55% for employee and children (no spouse)
That way, if our costs keep going up, so does the employee's share. Conversely, if employees remember to go in-network and generic drugs, costs may go down and so will their premiums.
We don't expect that this change will hurt morale or cause any problems with our EE. We still have an LTD policy that kicks in at 90 days.
For PPO (WAY more expensive) we contribute the same dollar amount as HMO, so the employee picks up the difference in cost when selecting the PPO.
We were looking at a 24% increase in medical premiums this year, so we did some creative re-arranging with other benefits, changed dental plans, etc. Reduced the "free" stuff and passed on only part of the medical increase to employees.
Our concern is, we did so many changes to deal with THIS year's increase, what are we gonna do next year if/when it happens again? There's not much left to "play" with.