In working with a new group client this morning, the usual question was asked…”How much should we contribute to employee and dependent premiums?” This particular employer had always paid 100% of the premium for employees as well as their dependents. However, premium increases of 20% over the last 3 years and the impact of a slow economy had this employer questioning their ability to continue this benefit.
At Benefaction, we have several recommendations. First, even if your company pays 100% of the premium for employees, make sure your contract with your insurance carrier reads 99%. For most carriers, if your contract states the company is paying 100% of the premium for employees, there are no valid waivers even if an employee has other coverage (for example, veteran coverage or Medicare). That means that the company would be paying for duplicate coverage. Secondly, we never recommend paying 100% of the dependent premium costs and here’s why. Let’s say you employ one spouse who has a working spouse and two children. The working spouse’s employer also offers group benefit coverage, but a large majority of employers only pay part (80%) of the employee premium and usually much less of the dependent premium (50%). Which employer is going to have the family enrolled? Obviously, the employer that is paying 100% of the premium costs will have the entire family enrolled even though the working spouse has employer provided benefits. Finally, we never recommend paying 100% of the total premium because part of what is needed in our healthcare reform is a true understanding of the associated healthcare costs and what each of us can do to stabilize those costs. We believe in fully educating the employees of our group clients so they understand the benefits, how to use and get the most from those benefits, the true costs, and how to be a better healthcare consumer.
Leave a Reply