CA Employers are offering Group Health Insurance and Group Benefits to their employees is at its highest level in almost 10 years. Despite the wild increases and crazy deductibles, #employers are offering Employee Benefits more than ever. The main reason, there is major competition for talent and employers want to stay relevant and compete with other similar companies. In the Bay Area, you have smaller companies competing with Google, FaceBook, Ebay, Apple, and many more. Because smaller companies cannot offer those super rich benefits, they are becoming more and more strategic.
Bay Area companies are getting strategic with their Group Benefits offering
Insurance brokers that specialize in Group Health Benefits or Group Medical Insurance, have an edge over other brokers that are “jack of all trades”. Brokers that focus on Employee Benefits are familiar with ways that companies can get strategic with what they offer, and offer it without making them go broke. One of the strategies is offering a mid range plan, and then “underfunding” or “insuring” the deductible. I don’t want to get too much into it, for obvious reasons.
Employee Benefits are the #2 cost for employers
Wages are the #1 cost for employers, with #EmployeeBenefits and Group Benefits being a close second. Because of this, strategy is the name of the game. Employers have to get creative with what they offer. When I come across a company that has an expensive Group Health Plan in place, the first question I ask the decision maker is “why”. Most times the decision to have a Gold or Platinum plan is well intended, but usually, almost always, wasteful. Even if a Health Insurance agent could cut your costs by even 10 or 15%, that’s definitely a conversation worth having.
Rating for smaller companies is different than larger employers
When you have a company with under 100 employees, the pricing on #GroupHealthInsurance plans are set by the State of CA, and age rated. That means that an employee that is 20 years old is half the price of someone that is 50. That’s just how its set up. The Trump Administration is trying to find ways to bend the cost curve on pricing, with ideas like more competition, being able to offer plans without things like maternity, trying to allow states to purchase Group Health Insurance across state lines. All of these things would probably have a positive effect on pricing, but until we reign in the COST of healthcare, the insurance will continue to be expensive.
Steve Brauer-Principal, Brauer Insurance Services LLC, www.brauerinsurance.com, (877) 421-4325