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Small Business Employee Benefits and HR Blog

Rethinking Traditional Health Benefits? Food For Thought

April 1, 2015
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Most people know how much money is spent every year on traditional health benefits. But did you know that in the United States, including taxes, monthly premiums, and leftover bills insurance refuses to pay, we spend more money on health insurance than almost any other product? And even if you’re in a position to have access to employer provided insurance, the drawbacks can be many: skyrocketing premiums, ever-increasing deductibles, the inability to choose your physician or even the particular plan you’d like.Traditional_Health_Benefits

Despite some frustration and exorbitant expense of traditional health insurance, these plans have yet to change. Insurers are still constructing exactly the same blanket plans that often do not fit the needs of the majority of Americans.

For employees, traditional health benefits may be working against you because they are:

  • Growing more expensive all the time because of emerging and more expensive technologies, treatments, and drugs.

  • Dependent on somebody else (a group administrator) selecting a plan for you, therefore limiting you by dictating what doctor or healthcare provider you can visit, and what services you can receive.

  • Becoming picked over and weak because employers cannot afford quality plans.

  • Socially questionable - when a plan fails to benefit its consumers, yet the members can’t live without it, multiple problems can arise.

  • Keeping you from retiring or working a job you don’t really want, all in the name of keeping your employer provided benefits.

  • Too limiting because they are not portable. If you get fired or laid off from your job, how will care for chronic or acute medical conditions for yourself and your family?

For small business owners, traditional health benefits may be working against you because:

  • Management spends time on insurance that could and should be spent elsewhere. You need to focus on your product, service, and your customers’ experience. Managing group health insurance is another hour you are not spending managing and improving your business. Even if you company is large enough to justify a dedicated group health insurance manager, with health insurance costs recently exceeding profits for many companies, most executives will wind up spending hours managing their group health benefits program.

  • It’s expensive. There are simpler, less complicated and more cost-effective ways to address your employees’ health care needs.

  • It’s contributing to an almost $4 trillion expense in our country, yet we are the unhealthiest developed nation on earth.

  • You will likely be on the same group plan your employees are on, paying high premiums, deductibles, and unsure of the coverage you truly have until a medical problem occurs. People are often shocked by how much their insurance doesn’t cover when they actually need it.

  • When employees have group insurance, they are ineligible for government tax credits and subsidies. This frequently leaves them with staggering fees and a large gap in coverage quality.

Conclusion

Traditional health benefits may be disadvantageous to both employers and employees alike. It’s expensive for everyone, it’s not portable once an individual separates from a company, it’s time consuming to manage, and it’s limiting in many aspects. Ultimately, traditional health benefits may not be doing you any favors after all.

What do you think about the pitfalls of traditional health insurance? We’d love to read your opinion.

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