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Greetings!
Ask any business owner what their fastest growing expense is and most will say "healthcare."
So what can you do about it other than increase employee contributions and raise deductibles?
I asked Tina Piccinnini of Coastal Financial Group, a full service agency for the major health insurance carriers, what small business owners can do to reduce this growing expense.
Her responses are below, and if you would like any additional information, please email Tina at tina@coastalfinancialgroup.com or call her at (973) 952-0300 x119.
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Reducing Healthcare Costs
An interview with Tina Piccinnini of Coastal Financial Group
Do you get better rates going with a larger broker vs. a smaller one?
I
get asked this all the time! The rates are set by the insurance
company and then filed with the New Jersey Department of Banking and
Insurance. There is a misconception that using a broker or agent costs
money. The reality is, even if you call the carrier directly, you
will pay the same price as if you use a broker. The broker is compensated
from the insurance company to provide service to the client. So, the
rates are the rates no matter which broker you use.
In your recent
experience, what insurance companies are offering the most competitive rates?
Insurance
is cyclical. So, every couple of years, someone will come out with
the newest, lowest priced plans. Right now, Horizon Blue Cross Blue
Shield tends to be the lowest priced in the Small Employer (2-50
employees) market for certain plans. They generally are lowest priced at this
time, but again, next year, someone else will come out with something that
makes them more competitive. It's ever-changing. The New Jersey Small
Group Reform Act of 1994 really ensured that the carriers all provide
fairly equal types of plans (they may offer different copayments or
prescription plans, but the general plans are all fairly similar).
Is it true your
premiums go down if you hire a single, 20-something male?
Yes,
this is correct. A young employee will help bring down the cost
for the entire group, just like an older employee will bring up the cost for
the group. The rates are based on an average age of the entire group, so
if you have a group with a young single male (the rates for a male are cheaper
than a female) the cost for everyone will go down a bit. Depending
on carrier and plan, I have seen premium rates for single people as low as $150 a month which was really
unheard of until recently.
What other simple
things can employers do to reduce their healthcare costs?
Click here to read Tina's response on managing plans, contributions, and why you don't have to wait for your anniversary date to save money>>>
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How bad is the healthcare problem?
Facts and figures from Wells Fargo
A 2007 whitepaper published by Wells Fargo has some stunning facts and figures about rising healthcare costs:
- In 2006 employer health plan covering a family of 4 averaged nearly $11,500. Single coverage averaged $4,200.
- Since 2000, employment-based health insurance premiums have increased 87%. Cumulative inflation was 18% and cumulative wage growth was 20% during the same period.
- Employee contributions towards healthcare coverage increased 143% since 2000. Average out-of-pocket costs for deductibles, co-pays, medications, etc, rose 115% during the same period.
Read the full white paper here.
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New website launched
After many months of development, our
new website has been launched. We feel
it is a better reflection of our plain-talk,
forward-thinking approach to solving our
clients' financial problems. Go to website>>>
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Our Services
Monthly financial reviews
Cash flow forecasting
Pricing for profitability
Customer & product line profitability
Cost analysis and reduction
Financial coaching
Financial modeling
Accounting/Bookkeeping
More>>>
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About Profit Point Consulting
Profit
Point Consulting works with small- and medium-sized businesses whose needs
extend beyond basic accounting and tax planning - businesses that want to
increase profits, lower costs, get better control over their financials, and
make more money. As
CFOs and Controllers, we give you a better handle on your costs and cash flow, so you
can make better pricing and capital investment decisions - and we do it in an
approachable, easy-to-understand way.
To find
out how our experience and insight - along with our forward-looking,
fresh-thinking approach - can help you, please contact us for a no-fee
consultation.
179-9 Route 46 West No.187
Rockaway, New Jersey 07866
973.659.1430
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