If You Have BlueCross/Blue Shield of Alabama
As you know, BlueCross is the dominant health carrier in the state of Alabama. We're seeing renewals of over 11%-15% and family rates now exceeding $1,000 monthly. Who would've ever thought that health insurance would cost more than most mortgage payments. However, there are some things you can do to reduce your overall costs and still use Blue Cross as your carrier. We've listed some ideas below that our clients are using to keeps costs down while renewing with Blue Cross.
1. One of the pitfalls with BlueCross family coverage
is that a single parent with one child on the health insurance has to pay the
"family rate". This penalizes the employee and employer. What we've successfully
done is move the children off the group plan into their own "individual" medical
coverage. This does 3 things. It lowers the employee's rate to "single
coverage", drops the employers rate to "single coverage" and gives the child
their own individual coverage that is not dependant on the parents employment.
It gives the parent more flexibility. A recent client had 7 single parent
employees paying family coverage. We dropped the employees coverage from $1,027
(family) to $356 (single). This saved the employer over $45,000 yearly in
premiums going from family to single.
Free online quote click this link to see for
yourself the rates.
2. Consider moving your plan to the 320 or 300
plan and implementing a Section 125 Cafeteria Plan. By moving to the
320/300 plans, you'll save considerably on your monthly premiums. You take those
savings and fund a Flexible Spending Account for your employees to offset the
higher out of pockets costs that employees might incur. By doing
this, you take advantage of the lower monthly premiums and then keep all the
money left in the Flexible Spending Accounts that employees don't use. This
technique is considered "benefits buying", that is, only paying for the benefits
employees use. Even if you don't want to fund a flexible spending account, at
least establish a premium only cafeteria plan that allows your employees to pay
for their share of the premium on a "pre-tax" basis. By doing this you'll save
payroll taxes. We can run you a free analysis to illustrate your savings..or
click the link below and calculate your own savings.
Calculate your payroll tax savings
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3. Extend the waiting period for new
employees to 180 days.
Consider lengthening your existing waiting period. Your employer-sponsored group
health plan is a sitting duck for people with health issues in their family who
want your health benefits more than they want to work for your company. The cost
of such people joining your plan is borne by both the company and your existing
employees. The solution to protect your company's group plan while still being
able to recruit the best employees with coverage from day of hire is to offer
"waiting period coverage" - a short-term health insurance policy paid for by your
company with a "new employee HRA". Short term medical policies cost about 50%
less than your average employer group policies. The temporary coverage also will
allow your new employees guaranteed acceptance into the group plan at the end of
their waiting period. This also eliminates employees coming on your plan for
just a short period, using the benefits then leaving.
Online Short-Term Medical Quote
4. Establish your own Dental Plan
IF you have dental coverage as part of your BlueCross plan, you might
consider dropping the dental coverage and establishing your own dental plan.
Instead of sending those dental premiums each month to BlueCross, you keep the
premiums and fund your dental plan. Less than 20% of your employees will ever
use the dental benefits. You can design your own plan, employees can use the
dentist of their choice, and you'll keep all the premium dollars that employee's
don't use. Again, this concept is "buying benefits". The traditional way of
paying for insurance is to send the premium to the insurer and let them pay the
benefits. But, what happens when you give the insurer $10,000 - $20,000 yearly
in dental premiums and they only use $5,000 for benefits? Guess what, you've
just given the insurance company a profit. They don't return the unused premium
do they? Click the link below to read how to establish your own dental plan.
Employer Dental Plan
We've shared just a few ideas on how to reduce your costs while at the same time continue to using BlueCross. However, for the greatest savings available, contact us for a HSA quote to save even more premium dollars and increase your bottom line profit.