Q: I am a small retailer in the central Massachusetts area. I am frightened that our medical rates will jump again in 2011. Is there anything I can do to prevent large increases? In the past, I have paid the whole premium for medical. I can no longer afford this. What are my options?
A: I have many clients who are anticipating medical rate increases in 2011. As an employer who pays 100% of the premium, you have many options to reduce costs and offset large increases.
First, I would recommend joining the Retailers Association of Massachusetts. The Retailerís Association can provide retailers (both small and large) with valuable information, resources and access to discounted insurance programs, such as workerís compensation. For more information about the Retailerís Association of Massachusetts, visit www.retailersma.org or call (617) 523-1900.
You should also consult with a dedicated employee benefits broker to review your plan options, contribution strategy and funding options. Employee benefits and plan options have become complicated. A good broker can help you sort through the maze of options available. Most brokers do not charge for the service and your rates do not increase as the result of working with a broker. In fact, a broker can often find significant savings for your company in the course of your plan review. Most good brokers will review all of your health plan options including Healthcare Reimbursement Accounts and small group self-funded plans. A good healthcare consultant will also review your requirements under Massachusetts and federal healthcare reform and offer guidance on how to stay compliant. The Retailers Association of Massachusetts can recommend brokers and service providers who have in-depth knowledge of the retail industry and current best practices with respect to plan design and ways to control escalating costs.
Most of my clients no longer pay 100% of the medical premiums. Instead, many have required employees to share in the cost of many of the employee benefits, especially medical. Over the last several years, I have seen a shift where employees pay for a greater percentage of the costs. Many of my clients pay for 50-75% of the medical care costs while the employee pays for the remaining portion.
Employee communication is also important. Do you employees understand that you have been picking up the entire premium for their medical expenses? This is a practice that is almost unheard of in 2011. Most of my clients require some type of employee contribution for medical benefits.
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