why exiting your group health plan and providing cash may be the right thing

Why exiting your group health plan and providing cash may be the right thing!

Brian Poger, CEO

I’m Brian, CEO of Benefitter

Employers have traditionally offered health insurance for two reasons

Retain Employee

Attract Employees1 2

Since WWII, employer sponsored insurance has stayed largely the same…

…even as our world has changed around us

until now

The Affordable Care Act (ACA) created two profound market changes that affect how all companies look at health coverage.

First, it created a market for insurance where anyone, healthy or sick can get covered

Second, it provided federal subsidies to help about 70% of the population buy insurance

These subsidies can be

enormous

A family of four spends on average $16,000 per year on health insurance

Group Health Insurance

Subsidized Individual Insurance

With subsidies, their total cost can be reduced to $7,000 per year, or less.

But there’s a catch (of course)

=Group Health Insurance

Employees who qualify for group health insurance cannot access these subsidized plans

Subsidies

So for employers, the only way to help your workers access subsidies, is to stop offering group insurance

Counter-intuitive? Yes.

Dropping group coverage is in some cases the only way to “do right” by your employees.

These rules might make you feel like you’re stuck between a rock and a hard place…

But we’ve already seen some companies take action.Several Fortune 500s have reduced their benefits and moved employees to the exchange.

By 2025, “fewer than 20 percent of workers …will receive … employer-sponsored health insurance”

- Zeke EmanuelWhy employers will stop offering insuranceMarch 2014

And soon, more may follow….

Drop Coverag

e?Employee Impact?

Employer Impact?

For the average employer or broker, determining the appropriate course of action is no easy task

Subsidies are based on income.So by dropping group coverage, some employees will come out ahead, while others will come out behind.

But savvy employers who recognize this can provide extra compensation to make it fair for all employees.

Extra post-tax

compensation

To do this right, you must account for:

• Individual market rates

• Plan design

• Post-tax employer contributions

• Government subsidies for exchange plans

• Employer mandate penalties

• Payroll tax

• Other tax effects

Sound complicated?

We make it simple

Good news…

With Benefitter Advisor, brokers can guide their clients to easily compare the costs of group vs individual health insurance.

We take into account the detailed makeup of an employee population, to predict the net effect of federal subsidies

We predict the value of subsidies that will be available, based on employee income and household size (using estimates that can be refined)

And using an employee-lens, we develop an approach to adjusting compensation in a smart, individualized manner

We’re entering a whole new world of health Benefits. I invite you to learn more by clicking the link below.

Click to learn more

Brian Poger, CEOinfo@benefitter.com

www.benefitter.com@benefitterHQ

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