Feeling sick about health-care premiums? It’s tough to cut medical costs and keep your employee benefits competitive, but insurance agents who work with restaurants offer seven tips on how it can be done:
Go shopping every year. You do it for car insurance, right? It’s even more important in the health market, where insurers are constantly cooking up new kinds of policies. Computerized searches make it easy to compare plans and gather quotes. You might not want to change carriers every year, but a better offer from a competing firm might give you leverage with your existing one.
Scope out the competition. Ask your agent what nearby eateries of similar size are offering in four areas: deductibles, co-pays, maximum out-of-pocket expense and prescriptions. If you’re way ahead of the pack, you can trim back your benefits while staying attractive to new employees.
Claim your records. Individual medical records are confidential, but you can ask your insurer for a summary of your claims history. You might find you’ve been paying out more in premiums than your workers have been getting back, which gives you a strong case for a rate cut. You might be able to discard benefits employees aren’t using. If they’re overusing others, like visits to the ER, you can raise the co-pays.
Got a Health Savings Account? Increasingly popular—enrollment nationwide has jumped 440 percent in two years—HSAs cut premiums by raising deductibles, to $2,200 or more for a family. To meet those deductibles, a worker can stash up to $5,800 a year, and get a tax deduction similar to an IRA. Switching from a traditional health plan, you can save up to 40 percent on premiums and contribute part of the savings to each staffer’s account. As a bonus, most HSA plans pay for preventative care—with no deductibles.
Check the Mini-Meds. Most restaurant employees need help with routine doctor visits more than cancer or bypass surgery. The average American has only $1,092 a year in health care expenses, reports the U.S. Department of Health and Human Services. Limited benefit or “Mini-Med” plans pay those bills, up to a yearly cap, for premiums as small as $10 a week.
Help them stay healthy. Some insurers set smaller deductibles for employees who don’t smoke or have low cholesterol or blood pressure. You can help staffers set goals by offering biometric screening of basic health indicators, for as little as $4 a head. Help them meet those goals by arranging discounted memberships in quit-smoking, weight-loss groups or gyms.
Drop your drug costs. Instead of a $20 co-pay for each prescription, changing to a 20 percent co-pay can prompt workers to ask for generic drugs. Help them sign up for generic programs at pharmacies like Wal-Mart, which offers 30-day supplies of medications for only $4.