The most valuable asset of any business is, undoubtedly, its workforce — particularly its key employees who strategize and execute the company’s vision, growth, and success. Not surprisingly, today’s top candidates make employment decisions based not only on salary but also on health insurance benefits.
In fact, a survey conducted by America’s Health Insurance Plans shows that 56 percent of US adults with employer-sponsored health benefits say that whether or not they like their health coverage is a key factor in deciding to stay at their current job. Another 46 percent say health insurance was either the deciding factor or a positive influence in choosing their current job.
Yet in today’s turbulent healthcare market of ever-increasing deductibles, copays, coinsurance, and other out-of-pocket expenses not covered by a company’s primary health plan, it’s difficult — if not cost-prohibitive — for businesses to provide key employees with the level and scope of insurance coverage they seek. This, in turn, affects a company’s ability to attract new talent, satisfy existing talent, and retain both.
According to industry sources — including the Mercer National Survey of Employer-Sponsored Health Plans and the Business Group on Health’s 2021 Large Employers’ Health Care Strategy and Plan Design Survey — employers will see a 4.4 to 5.3 percent increase in 2021 health plan costs. Even if premiums don’t increase to those levels or remain the same as in 2020, these sources say that employers will continue to struggle with affording adequate employee health benefits amid plummeting revenues due to COVID-19.
The tremendous economic strain caused by the pandemic has exacerbated the longstanding challenge of providing optimal health benefits for top talent. The future course of the disease and economy may still be unclear, but this is certain: Businesses that use affordable, nontraditional health plans to boost benefits for key hires will be better able to recruit and retain talent going forward.
Key employee healthcare cost reimbursement plans provide one example of a nontraditional health insurance benefit plan that could help employers solve the costly healthcare market/competitive workplace dilemma. These fully insured, excepted-benefits plans are also referred to as “select” or “executive” healthcare or medical cost reimbursement plans, and they are not to be confused with health savings accounts (HSAs) or other consumer health accounts.
Excepted-benefits plans offer employers a cost-effective way to boost their underlying health insurance benefits for key employees while differentiating their total compensation packages from competitors. In general, these plans provide participants with tax-free reimbursement for virtually all medical expenses not covered by the employer’s base plan, and all premiums are tax-deductible for employers. The employer’s base plan can be a group policy, individual policy, spousal policy, or Medicare….