Setting Up Group Plans

[MDO]

I am an employer in a service industry looking for some help.

Here is our current situation:

I have a grandfathered major medical plan for management staff and a voluntary plan for my workforce. In the last three years we have averaged 600 employees.

I cannot offer a major medical plan to all of my workers due to low participation. It is projected that only 5%-10% of the work force would enroll in a major medical plan.

Our business model is to tailor service to specifications at the account level. In order to be competitive I need to offer my employees working under specific contracts a major medical plan.

What course of action do I need to take to set this up?

Any help that you can give me is greatly appreciated.

Thank you,

MDO

 

[STIBROKER]

you could give a bonus to them to buy their own individual health insurance......

 

[gailnow]

What industry are you in and which state?

 

[MDO]

Security, IL
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you could give a bonus to them to buy their own individual health insurance......

Is this actually feasible?

 

[STIBROKER]

yes it is.....the only problem is the uninsureables.........at that point you can see if they really want it... find a risk pool rate ....and bonus that amount to them......I get calls all the time from people saying that their employer is giving them X amount of dollars to get health insurance and it is still a write off for the employer as compensation.....

 

[stuy119]

MDO, I'll send you a PM with my contact info if you want to talk offline about this. I'm an independent agent in the Chicagoland area.

 

[leevena]

Yes, you can offer them a bonus. It is a taxable event and is done all the time. What they decide to do with the money is up to them though.

As for your initial question, I do not know enough to give you an exact answer. You state that 1) "you need to offer a MM plan to stay competitive", and 2) "I cannot offer a major medical plan to all of my workers due to low participation." If this is true (and I am not saying it is not true) then you either spend the money to get your employees covered, or you just go out of business.

My guess is that you will need to reach a happy medium between covering everyone and spending prescious corporate dollars. I would try a combination of a few things, including, offering a much lower cost option such as a high deductible, redefining your work force so that the truly "key" workers are eligible for coverage, put in place a POP plan for the premiums, look at prevailing wage work (sounds like it might apply to you), get a better handle on who has coverage elsewhere, look at longer waiting periods, etc. You may find that even though you have 600 employees you may significantly less who would become eligible. So don't use your current group plan rates x 600 lives to get a budget. Both figures will be much less.

 

[MDO]

As for your initial question, I do not know enough to give you an exact answer. You state that 1) "you need to offer a MM plan to stay competitive", and 2) "I cannot offer a major medical plan to all of my workers due to low participation." If this is true (and I am not saying it is not true) then you either spend the money to get your employees covered, or you just go out of business.

My guess is that you will need to reach a happy medium between covering everyone and spending prescious corporate dollars. I would try a combination of a few things, including, offering a much lower cost option such as a high deductible, redefining your work force so that the truly "key" workers are eligible for coverage, put in place a POP plan for the premiums, look at prevailing wage work (sounds like it might apply to you), get a better handle on who has coverage elsewhere, look at longer waiting periods, etc. You may find that even though you have 600 employees you may significantly less who would become eligible. So don't use your current group plan rates x 600 lives to get a budget. Both figures will be much less.

I want to insure all employees on a per contract basis. The majority of my clients are not willing to pay for major medical directly or indirectly. I would like to setup a plan for the clients that make it a contractual obligation and are willing to pay for the increased cost.
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yes it is.....the only problem is the uninsureables.........at that point you can see if they really want it... find a risk pool rate ....and bonus that amount to them......I get calls all the time from people saying that their employer is giving them X amount of dollars to get health insurance and it is still a write off for the employer as compensation.....

Wouldn't payroll taxes still apply or could I setup an HSA (or some other vehicle) that they could draw on to pay their premiums?

 

[STIBROKER]

no way around tax's....hahahaha....and no.....HSA accounts do not work that way......if you admit or pay the company direct it can be viewed as a group plan...which it is not....it is individual plans payed out of the pockets of the employee....if they choose so...and the dictate what deductibles they want and the cost.....I would have an individual broker on hand to refer your people to to help guide them in their best interests.....and this is just one option...there might be a way to carve out your projects and write a group plan on but that would take a local expert to run that up the flag pole and see if anyone would bite.....

Wouldn't payroll taxes still apply or could I setup an HSA (or some other vehicle) that they could draw on to pay their premiums?

 

[MDO]

no way around tax's....hahahaha....and no.....HSA accounts do not work that way......if you admit or pay the company direct it can be viewed as a group plan...which it is not....it is individual plans payed out of the pockets of the employee....if they choose so...and the dictate what deductibles they want and the cost.....I would have an individual broker on hand to refer your people to to help guide them in their best interests.....and this is just one option...there might be a way to carve out your projects and write a group plan on but that would take a local expert to run that up the flag pole and see if anyone would bite.....

Thank you!