Over the past few years, Americans have been increasingly frustrated over the rising cost of group health insurance. While employees see their take home pay shrinking, not many stop to ask themselves how this affects their employers. Perhaps they believe that the cost is being passed along to them, but how will they know if business owners don’t tell them?
What Does the Average Company Pay for Group Health Insurance?
The company’s share of group health insurance varies widely — ranging from about 30 to 80 percent — but according to the U.S. Bureau of Labor Statistics, the average employer covers about 70 percent of employee insurance premiums. Multiple factors can explain the wide range, including the size of the business, the number of employees on the group health plan, and the illness level among them.
How to Talk to Your Employees About Group Health Insurance Costs
For the most part, your employees want to know that you are being up-front with them. If they see that their group health insurance costs are rising year after year, they may be concerned. They may even complain to you about their insurance costs. It doesn’t mean they are ungrateful — it just means that they are frustrated.
The best way to communicate your share of the group health insurance costs is to be open with your employees. When distributing open enrollment sheets with costs and plan changes, be sure to give them the full cost, including your share of the payment. If employees feel as though they have all of the facts, they are less likely to be angry about the increase, and more likely to feel appreciative of your contribution to the premium cost.
Be Sure to Shop Around for the Best Group Health Insurance Rates
The most effective way to keep your group health insurance cost to a minimum is to shop around every once in a while. Switching insurance carriers annually is probably too often, but perhaps every 2-3 years is sufficient. While few employees want to switch doctors, they are likely to agree if it means they could save a significant sum of money.
When the times comes to shop around, don’t count out alternative forms of benefits. If group health insurance costs have become too much for your small business to handle, consider a defined contribution plan, which can help you manage costs with more predictability. Employees will still receive a meaningful health benefit, but your budget won’t change unless you want it to.
Many employees are unaware of how much their company contributes to their health plan. The average worker will appreciate your candor in showing them the full cost, as well as the breakdown of each party’s share. Remember that there are plenty of alternative options, should your group health costs become unmanageable.
How do you discuss group health insurance with your employees? Let us know in the comments below!