Nothing can furrow one’s brow like being reminded of the cost of healthcare benefits. Typically and unfortunately, healthcare benefits tend to comprise a large portion of the deductions that come out one’s paycheck, and are only poised to continue to grow based on the current state of affairs. Because of the rising cost of my own healthcare contributions with my present employer, I began to explore another avenue that would meet the needs of my family while saving both myself and my employer money.
I am the non-custodial parent of several children for which I provide support and medical benefits. Since my ex-spouse had the children covered under her plan at work, I opted not to purchase benefits through my present employer in order to save several hundred dollars a month. Recently, the Texas Attorney General’s child support branch mandated that I procure health benefits for my children, despite the fact that I provided them proof that my ex-spouse already had them covered. Since I had no choice in the matter and since a legal mandate qualifies as a life status change event (enabling a healthcare provider to allow someone to enroll in benefits outside of their normal “open enrollment” period), I decided to just go ahead and cover the whole family. I submitted my application and waited for a response. Finally after several days, I was told that only the mandated children would qualify under this life status event and that the rest of my family would have to wait for open enrollment in order to be covered. What this meant is that I would be paying out the same amount of money that it would cost to cover all of my family, yet I would only have my non-custodial children covered. No bueno.
Refusing to give my company’s benefits provider one dime, I then decided to explore the alternative of purchasing my own health insurance as an individual. I, as I’m sure many have, had always been brainwashed to believe that purchasing insurance on your own was so outrageously expensive that it couldn’t possibly be affordable, so prior to this I had always just opted to tell my employer to “give me the works” and pay whatever was required. After some inquiry, however, I found that there were many affordable options out there with comparable coverage benefits, none of which cost me any more than my employer was charging me for my share! After getting quotes from several companies online, I finally settled on one whose representative helped me design a custom benefits package that fit my budget and needs to a tee. I lost nothing as far as benefits are concerned and I gained freedom from the “employee group” by which healthcare providers judge employers when deciding their rates. Additionally, I approached my employer about reimbursement for 50% of the benefit costs. Since they were already willing to contribute that percentage for employees who were part of the group plan, they agreed with the logic that they should have no qualms about contributing that percentage to my costs on my personal plan. In the end, I spent 50% of what I would have contributed to the group plan, and they saved 50% of what they would have been contributing on my behalf! It was a win-win situation.
Employers: Consider This
Here’s food for thought for employers who have employees for whom you provide company sponsored benefits: Stop doing it. Instead, consider the scenario where you simply ask your employees to seek out their own benefits from the company of their choosing, and then reimburse them half of their monthly premiums. Let’s look at some numbers.
My employer currently graciously covers a full 50% of what they are charged to provide me health benefits. If they’re charging me $450 a month, then they are paying $450 themselves. Multiply their $450 contribution by their twelve employees, and they are spending $5,400 a month. If instead they allowed each employee to procure their own benefits and, on average, considering that some employees may have pre-existing conditions or families, the monthly premium was $600 per person, this means that the employer would spend only $3,600 a month while each employee, on average, would spend $300 a month. The result is that the employer saves $1,800 per month in benefit contributions and the employee saves $150 (again, on average) per month. An annual savings for the employer of $21,600 and $1,800 for the employee. These figures don’t even take into account the savings realized by having employees administer their own benefits with their own providers. It definitely looks like a win-win scenario to me!
So then, why aren’t more employers approaching employee healthcare benefits in this fashion? Because I actually went this route and it worked out well for me, I can’t say it’s because my theory is flawed. More likely it is simply the mentality of “status quo” that prevails and has caused employers and employees alike to believe that group medicine is the best way. I encourage employers and employees, however, to explore this approach as a fiscally sound alternative to meeting the need for healthcare benefits. Lose “the group” and allow employees to handle their own benefits administration.