Regardless of the final shape of health care reform, one thing remains certain: Employer benefits costs will continue to rise in 2010. Here are some ways to minimize these costs during this year’s open enrollment:
1. Don’t over-insure. Just because a plan is labeled "premium" doesn’t mean it’s the best plan. If employees aren’t heavy users of your benefits plans, determine if "standard" or "value" plans offer a better fit.
2. Explore trade-offs. On the flip side, heavy users are attracted to plans that reduce out-of-pocket expenses such as co-pays and deductibles. Those employees also tend to be willing to trade higher premiums for the security of knowing that out-of-pocket expenses will be minimized when they are using the benefits.
3. Offer Health Savings Accounts. These have become increasingly popular due to increased flexibility over traditional FSAs. Now is a good time to learn more; employees can roll over these pretax dollars each year and adjust contribution levels at any time, which allows employees to save for longer-term health care.
4. Consider a Professional Employer Organization (PEO). Partnering with a PEO gives small businesses the ability to offer more comprehensive and competitive benefits at a much lower cost. Due to economies of scale, PEOs can negotiate for benefits plans on behalf of their client by leveraging the combined size of the thousands of employees the PEO represents.
Just as our politicians are scrutinizing options to avoid placing an additional financial load on the health care system, business owners should carefully evaluate their choices during this year’s open enrollment season.
Burton M. Goldfield
President and CEO
San Leandro, Calif.