Health Benefits – How a CFO Can Help

Your Healthcare Benefits Review – It is that time of year again when your benefits provider will be reviewing your healthcare benefits.  For most employers this will involve some tough decisions if their healthcare premiums suffer a dramatic increase.  There are many things you will want to consider as you navigate healthcare costs for 2018.  Healthcare is a balance between what it will cost the business and the ability to attract and retain qualified employees.  Your CFO can help you navigate these issues.  Here are some things to consider that may be able to help you reduce your healthcare costs:

1.  Consider using a health insurance broker rather than a single provider.  Health insurance brokers can typically reach out to several providers at once to get you the best rate.  A good broker will have your employees privately fill out medical information and submit this information electronically. You as the employer should not see this information due to HIPPA regulations.  This method allows the broker to bring back real healthcare costs rather than plan estimates that will change once the group is underwritten.

2.  Your group may get better rates with a Professional Employment Organization (PEO).  PEO’s underwrite thousands of lives for healthcare insurance.  The PEO will process your organizations payroll, health insurance, workers comp and becomes your human resource department.  To belong to a PEO the employees become employees of the PEO, but the employer has all rights to hire, discipline and control the work of the employee.  Because of the number of lives covered by the PEO, many companies find this model saves them money and gives them time to focus on other areas of their business.

3.  Captive Insurance may also be another option for companies looking to reduce their healthcare costs and reduce taxable income for the company.  This type of plan insures part of the company group through a Captive Insurance Company.  The Captive Insurance model allows the employer to pay tax deductible premiums to the Captive Insurance Company and underwrite some of the risk for premiums with the Captive Company.  The Captive Insurance Company is a separate company owned by the employer.  The employer still has access to the money in the Captive Insurance Company and can take loans or distributions from the Captive.  Typically, this model works best for companies with 50 to 250 lives to be covered by health insurance.

4. Check out new APPS that work outside your healthcare plan.  Virtual care apps have real doctors and nurses available to diagnose the patients and issue prescriptions.  An employer can buy monthly subscriptions for employees for a small monthly fee.  The employee can typically talk to a medical provider within 30 minutes of logging into the APP.  This allows employees timely medical care without having to lose an entire day going to the doctor’s office.  The employer and the employee both benefit from this type of program.

5.  Large employers may consider using an on-site clinic for employees to reduce medical costs.  Clinics are available to employees during working hours.  Employers who use clinics encourage employees to use the on-site clinic for their medical needs.  These clinics are typically outside of the employer medical plan, free to the employee and may allow employees families to use services.

When evaluating your health insurance renewal make sure to include your CFO for your analysis.  Your CFO will help you analyze what your competitors are providing for benefits in your area to help ensure you are competitive.  Use their expertise to make sure there are not hidden costs or risks in your health insurance strategy.