3 changes you need to make to your Employee Benefits Plan in 2018 if you want your Security Company to survive
We all know the "Affordable" Care Act, isn't! Before the ACA became law in March 2010, security companies and 15 other industries that rely on a predominately low wage hourly workforce, were not required to provide company-paid health insurance to their full-time employees. Beginning in 2015, the IRS started enforcing the ACA Employer Mandate provision, and that added a significant overhead expense component to security guard companies with more than 50 full-time employees. This expense, in turn, eroded a substantial portion of their profit margins. Few if any, security companies have wholly recovered those lost profit dollars that were vaporized with the passing this monumental legislation.
When you tally the post ACA expenses for increased employer contributions, compliance, and complex benefits administration, current estimates peg the damage at over $1000 a year for every full-time active employee. You don't have to look far to realize this number is credible. Just look at your profit margins before 2015 and compare them to the margins you can earn and maintain today. If your own company's specific circumstances do not make this comparison feasible, merely look at any number of the publically traded security companies sequential annual reports, and you can see this unfortunate reality unfold.
Corporate Benefits Alliance dedicates its professional practice to mitigating the financial burden and to simplify the complexity of ACA compliance for companies in sixteen specific industries. Bound by the characteristic of relying on a predominantly low wage hourly workforce, after the ACA passed, no other industries came close to feeling the same level of pain as these sixteen. Listed below are three specific strategies you can implement if you want to reclaim the profits the Affordable Care Act stripped from your company's bottom line.
Abandon ship on the ACA Rate of Pay Safe Harbor. The Rate of Pay ACA Safe Harbor does nothing but assure your company premium contributions to your hourly employee’s medical insurance will be highest possible under the Act. Additionally, this will maximize the number of hourly employees that will elect your company sponsored plan for their primary their medical coverage. You might as well post your banking passwords to your company social media pages. Either way, you can expect a zero operating account balance at the end of your fiscal year.
Break out of the Managed Care Paradigm. According to The 2017 Kaiser Foundation Employee Health Benefits annual survey, 90% of all covered employees are in managed care health plans. The same study reveals the average cost of single coverage in the United States for an ACA compliant HMO plan is $563 per month. The average amount of that premium shared by the employee is just slightly over $100 a month. Using these numbers and looking at this from the perspective of a security company with 1,000 full-time employees, if only 20% of the eligible employee population participated in the plan, this would add over $1,100,000 a year in additional company expense. By adopting reference-based pricing on specific medical procedures and a Medicare Plus claims adjudication model, your security company could cut that number in half. These savings are achieved without sacrificing quality of care or the benefits your employees receive. Corporate Benefits Alliance offers a medical plan through an affiliated captive insurance company which incorporates both of these strategies. On average, monthly premiums range between $250 - $300 for benefits comparable to a gold level health plan. Consider the following: A California security company with 1000 full-time officers and wages ranging from $11 to $14 an hour, could cut company contributions to each participating employee's medical plan from $426 a month to $55 a month, solely by implementing the above two strategies. At an average participation rate of 20% of eligible employees, the calculation reaffirms the number above and would save the security company over $1,000,000 annually, only by adopting these strategies.
Embrace the efficiency and cost savings of Telemedicine. Telemedicine is experiencing exponential growth both inside of employer-sponsored health plans and as a stand-alone employee benefit. This phenomenon comes as no surprise to us, considering a well-built telehealth platform can redirect as much as 75% of the primary care claims expense away from an employer and their medical plan. At a per capita cost of less than $10 a month (for full family coverage), Telemedicine can save an employer's health plan an average of $673 for every single telehealth visit completed by an employee or one of their family members. Additionally, a recent independent study conducted by Veracity Analytics concluded that an employer could save an estimated $46 in lost productivity every time an employee uses Telemedicine, instead of taking time off work to go to the doctor. These savings are so compelling that we integrate Telemedicine into every medical plan offered by our captive insurance company. Additionally, we never impose a deductible, co-pay or per session charge for any employee or dependent using our telehealth platform. You may be interested in downloading the case study from our website showing how T-Mobile saved $2,200,000 annually by implementing a telehealth platform, which is powered by our Telemedicine partner.
I thoroughly appreciate that time is your most valuable resource. If you made it to this point in the article, I sincerely hope you feel yours has been well invested. If any of the strategies I have outlined have piqued your interest, or if you would like to explore additional cost-saving initiatives, I invite you to contact either myself or any of the benefits professionals at Corporate Benefits Alliance.
Bruce Monteith is President and Chief Operating Officer of Corporate Benefits Alliance, a Benefits Consulting Firm dedicated to simplifying the complexity and mitigating the financial burden of ACA compliance for companies in sixteen specific industries. If you would like to learn more about implementing any of the strategies mentioned in this article, please feel free to speak with any of our Benefits Professionals at 818.651.6699. You may email Bruce Monteith directly at bmonteith@TheCorporateBenefitsAlliance.com. All licensed insurance products are exclusively offered through Speyer Meridian Insurance Services, LLC * CA License # 0K36471.