Central Penn Business Journal - As health-insurance premiums peak, employers struggle to lower costs

As employers’ health-insurance premiums have increased by doubledigit percentages in recent years, many midstate businesses have stopped paying all the costs to insure their workers and have started asking them to pony up money.
The peaking premiums problem has prompted area employers to make other major changes when it comes to pro viding health insurance, local healthcare observers said. Small businesses have been less loyal to insurance carriers, switching to the cheapest carriers. Companies have talked more about their rising insurance costs with their employees, so workers aren’t surprised and disappointed when their costs go up. And employers have offered multiple health-insurance plans, so workers can opt to pay nothing for a high-deductible plan or to pay a lot for a plan with great coverage.

Most Popular
10 Jobs That Pay $30 An Hour
5 Regular Mistakes In Public Speaking
13 Job Interview Mistakes To Avoid
Interpersonal Communication: Styles Of Conflict
Business Plan Sample

Small businesses can contain premium hikes by structuring their employees’ plans creatively, said Tom Henschke, director of SMC Business Councils’ central region office in Wormleysburg. SMC is a Pittsburgh-based association that represents 5,000-plus small businesses in Pennsylvania.
“You can cut 5 percent off your premium if you raise the deductible instead of asking employees to pay more,” Henschke said. “… Or, you could keep a zero-deductible plan for a Cost (to employees) and add a $500-deductible plan for free.”
Dave Wuenschel is vice president and senior consultant with The Benecon Group, an employee-benefits consulting firm in Manheim. Township, Lancaster County He sees many companies offering more than one health-insurance plan and planning them five years out. That is a smart move, he said.
“Employees get disgruntled if they only have one choice and they have to pay for that plan,” Wuenschel said.
Businesses still are offering plans rich with benefits, but employees now must pay for the perks, Wuenschel said.
The companies that are best able to change their plans communicate about their health-insurance costs to their workers, Henschke said. Small-business owners make the changes as a last resort.
Henschkes office has fielded a lot of questions about health savings accounts (HSAs), but few small businesses have started the accounts, he said. The reason, he said, is the high cost of offering the highdeductible plans that work with the HSAs.
Lots of members of the Pennsylvania chapter of the National Federation of Independent Business are using HSAs to try to cut their health-insurance costs, said Kevin Shivers, director of the chapter in Harrisburg. Those businesses are spending 40 percent less on their health-insurance premiums than when they used traditional preferred provider organization (PPO) or point-of-service (POS) plans.
“I just talked to a business owner who called this morning in tears because he just got his Blue Cross plan renewal and said he doesn’t know how to afford it,” Shivers said. He suggested that the business owner consider starting an HSA.
An HSA pairs a savings account for medical expenses with a highdeductible health-insurance plan. Employees and employers can contribute money, untaxed. The HSA is portable, so employees can take the money in their accounts when they leave their employers.
“As companies’ premiums have gone up through the roof and employees have been asked to contribute, there’s been a hue and cry for change,” Shivers said.
Copyright Journal Publications Inc. Sep 30, 2005
Provided by ProQuest Information and Learning Company. All rights Reserved