In 2003, I founded my employee benefits consulting firm, BSI Corporate Benefits. I have two business partners who run one of the most successful law firms in the Midwest. The most important piece of advice they gave me – and that I continue to follow – is, “focus on what you need to do to grow your business.”
So many businesses fail in the first two years because they are penny wise and pound foolish.
For example, they decide to handle their own taxes instead of hiring a CPA, “because it saves money,” and they subsequently spend over a 1,000 hours trying to figure out how to keep their books and pay their taxes instead of focusing on selling their intended product or service.
I believe that companies large or small can use this same approach to steering through the myriad of new rules and regulations that Health Care Reform (HCR) promises to deliver in 2014.
I firmly believe that by subscribing to the following course of action, companies can come out ahead of their peers when it comes to surviving HCR.
Utilize your insurance agent and their expertise
If you currently offer health insurance to your employees then you most certainly have an insurance agent or consulting firm that handles your employee benefits. That insurance agent gets a check from the insurance company every month regardless of whether they are actively working for you or not.
Pick up the phone and schedule a meeting with them. They are licensed and are getting paid to provide you with the exact compliance support your company will need to navigate HCR.
If your agent or consultant’s official response to HCR consists of the following responses, “We do not have a crystal ball”, “You should expect health care costs to rise,” and/or “I will email you some links to articles and IRS guidelines,” then it’s time to find a new agent.
They are putting the responsibility back on you and not providing you with the expertise or guidance to maximize your company’s health care investment. Your consultant should be proactive in charting a course for your company and is responsible for giving you concrete recommendations.
A proactive company develops specific action plans for each client based on their current situation (i.e. benefit structure, number of employees, demographics, etc.). They provide each client with detailed information on how the “pay or play” calculation will affect their organization with respect to the potential penalty for not offering insurance to all full-time employees.
Proactive companies also retain attorneys at no cost to the clients and issue legal opinions when necessary. It is imperative that you work with an agency that is proactive in examining your current situation and offering recommendations and solutions to keep your company from significant financial risk.
If your current agent is not meeting these requirements, it may be time for a change. You can change agents or consultants at any time without changing your current insurance carriers. It is important you have the right team to support you and your company.
Steps to becoming HCR compliant
? Retain the right agent or consulting firm that is prepared to navigate the compliance regulations on current and future Health Care Reform laws.
? Determine if your company must comply with HCR by conducting a battery of full-time employee tests.
? If you have to comply per the guidelines, ask if your organization is at risk of penalty based on lack of providing insurance or providing inadequate insurance (benefit/cost to employees).
? Review and analyze the benefits and costs that will be offered through the state-wide exchanges.
? Develop a strategic business plan that meets your organizations employee benefit needs and protects the bottom line.
Addressing rising health care costs
Health Care Reform will neither save nor destroy your business.
Once you have identified professionals that you are confident will protect you from financial penalties associated with Health Care Reform, take a deep breath. Now it’s time to refocus your discussions with your agent on fixing the larger problem – rising health care costs.
Health care costs continue to rise at double digit levels. The companies that are adopting the following course of action with their benefits programs will be successful in slowing the rise in employee health care costs.
• Negotiate with insurance carriers. Your agent or consultant should not be a carrier pigeon for the insurance company. It is their responsibility to represent you, the CLIENT, to make sure that you and your employees are getting the highest level of benefits for the lowest possible cost.
• Implementing purpose-driven employee wellness programs. In order to be successful, wellness programs require top down leadership (“Do as I do.”) and incentives for employees to engage. A good benefits company provides substantial incentives to clients to encourage wellness participation. It’s important to supply a wellness coordinator for each client. These coordinators are in charge of taking the shiny wellness tools the insurance carriers offer and working with the client to come up with a strategy that helps employees access these tools. If you own a company and are relying on employees to engage because “it’s the right thing to do” without providing incentives and support, you will surely be disappointed with the results.
• Adoption of consumer-driven care. Health Savings Accounts (HSA) have been around since 2004 and, if implemented correctly, can enhance the benefit offering to your employees and introduce the fundamental shift which is required to slow rising costs. When implemented properly, HSA programs can slow yearly increases by as much as 5 percent over traditional plans. Some clients have saved millions of dollars.
• Adopting a value-based benefits program. These types of programs tie engagement by employees to benefit level and cost. This involves carefully evaluating carrot and stick approaches to give employees incentive and motivation to engage in their well-being. These programs work. BSI represents a Michigan auto manufacturer that has succeeded in having 90 percent of its 1,000 employees and their spouses receive yearly physicals. How? Simply by including incentives to do so in their benefits program. Employees receive a higher level of benefits if they choose to get a physical and complete a health risk assessment.
The best prescription for surviving health care reform: engage professionals you trust to handle these health care changes. Only then can you shift your attention to doing whatever you do best.
The year 2014 will come and go and the companies that will thrive will be the ones who are proactive about HCR – the ones who have engaged professionals to handle these regulations so they can shift their time, energy and money to improving their own products and services.
Anthony (Tony) DaRe, the Agency Principal of BSI Corporate Benefits in Bethlehem, worked 17 years for a pair of large insurance carriers prior to founding BSI in 2003. His firm represents over 100 clients in 17 states, including local clients Coordinated Health, LifePath, Lehigh Valley IronPigs and The Express-Times. He can be reached at email@example.com or (484) 821-1300, ext. 201.