Companies can mitigate steep health insurance premium increases

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Hitting the gym after work instead of your favorite bar might improve both your waistline and the bottom line especially the cost of employee health insurance and benefits.|ret||ret||tab|

Rising premiums have become common over the past few years, but local insurance professionals say small businesses can still take steps to keep insurance and benefit costs down.|ret||ret||tab|

Darren Coffman, president of Benefits Unlimited, said that in the last couple of years ,he has seen "tremendous medical inflation."|ret||ret||tab|

While he says it's too complicated to single out just one factor, he attributed the increase to over-use of medical facilities, government regulations, under pricing by some insurance companies and medical malpractice suits.|ret||ret||tab|

"All of these things play a factor," Coffman said.|ret||ret||tab|

Louis Bartholomew, with Rebsamen Insurance, said he has seen several of his clients hit with steep increases. He said that some had seen premiums rise by more than 40 percent.|ret||ret||tab|

"I have seen, just this week, increases ranging from 4 percent to a 43 percent," Bartholomew said.|ret||ret||tab|

While several insurance experts advocate wellness programs, Bartholomew said it won't help to start one when a premium increase arrives.|ret||ret||tab|

"There is very little they can do when the renewal comes, in that moment," Bartholomew said.|ret||ret||tab|

Mike Scott, an account executive in the employee benefits division of Barker Phillips Jackson Insurance, cautions that small businesses should always make sure they contact a licensed agent, especially small businesses that have recently grown to the point they will offer benefits for the first time.|ret||ret||tab|

"This is a big step for any employer; this will quickly become their number two fixed expense, right behind wages," Scott said.|ret||ret||tab|

Scott said that an independent agent can benefit a business by offering plans from a variety of different companies. And just as when hiring any consultant or service provider, the employer should always perform a thorough reference check.|ret||ret||tab|

Scott also mentioned an option many other insurance experts advocate, having an employee wellness program that stresses long-term health. Many strategies include helping employees quit smoking, lose weight and exercise regularly.|ret||ret||tab|

Programs that encourage employees to hit the gym, while not producing tremendous savings, can still help small businesses.|ret||ret||tab|

"Not by a staggering amount, but it has made a difference," Scott said.|ret||ret||tab|

Coffman said that wellness programs must focus on long-term benefits, and that nobody will benefit from a single week of working out.|ret||ret||tab|

He also stressed creating "a plan that focuses on providing an affordable way to see a physician but also focuses on wellness," Coffman said.|ret||ret||tab|

Scott said, however, that an overly aggressive wellness program can make some employees feel like the boss has become Big Brother.|ret||ret||tab|

"You get into some privacy issues with having smokers pay a higher rate, some think then the chubby guys should be paying more than the skinny guys," Scott said.|ret||ret||tab|

Several area insurance executives attribute the recent rise in premiums to over-use of medical facilities especially using the emergency room for simple illnesses.|ret||ret||tab|

Scott said that without coverage, people would purchase over-the-counter medication for a cold and treat themselves, but if their medical plan only requires a modest co-pay, often as low as $10, they use their doctor or a hospital.|ret||ret||tab|

He also said, however, that employers can encourage employees to change their habits without necessarily being punitive.|ret||ret||tab|

"It's got to start with the individual employee and their lifestyle," Scott said, "and the way they utilize their health care. You would be amazed at the number of people who go to the emergency room for a cold."|ret||ret||tab|

Coffman believes more employers should use benefit plans like the popular cafeteria plans that present employees with a variety of choices and also allow for tax savings.|ret||ret||tab|

Because cafeteria plans draw from pre-tax monies, it saves money for the employee by reducing the amount the government uses in calculating individual taxes.|ret||ret||tab|

"Not enough people use it, but we're seeing an increased trend," Coffman said of the cafeteria-plan system. "There's no sense in paying Uncle Sam money we don't have to."|ret||ret||tab|

While many small businesses, especially new companies, often find creating a good benefit package stressful, Coffman said that "with a qualified firm setting up it's a no-brainer for employers. Anybody starting a new business is going to have several challenges. One of those is getting good people and keeping them, and there lies the reason for good benefits."|ret||ret||tab|

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