This blog is about safety incentive plans
Results recently released from Salary.com's 2005 Small Business Basic Medical Survey show that nearly 90 percent of small businesses are paying more than last year on basic medical insurance for their employees. And these soaring healthcare costs are forcing small businesses, in many instances, to adopt measures that lower employee take-home pay. But there may be something you can do, as an employee with alternatives for healthcare coverage, to cause a swing in the other direction: Talk to your employer about exchanging your benefits for as much as 10 percent in extra pay.
A Win For Employees
Karen is the Human Resource Manager is one of the rising number of American small businesses (200 employees or fewer) that are either offering employees significant incentives not to participate in the company medical plan, or actively encouraging employees to enroll in their spouse's plan. Doyle opted out of her company's health plan because her husband's plan costs the couple less in monthly premiums and co-pays. happens to offer up to $100 per month, $25 for each dependent, to every employee who chooses not to participate in the company's health plan. While that may not be a huge amount of money, Doyle feels that "it is nice to have that available to pay for other benefits such as life insurance, or other insurance projects offered through my employer".
Salary.com's study found that incentives such as lump-sum salary increases, cash rebates, and contributions to other employee benefit accounts, such as a 401K plan, are offered by 14 percent of small businesses to employees who opt out of company medical plans. Some companies that were surveyed indicated that they give the cash value of the savings on their health benefits to plan non-participants. This can add up quickly. Richard Cellini, Head of Research at Salary.com, estimates that "many companies could offer employees a 10 percent salary increase (in lieu of plan participation), and still lower total payroll expenses in a given year".
Use the benefits section of Salary.com's Salary Wizard to calculate the average amount your health plan costs, based on job title and metro area. Keep in mind that data in the Salary Wizard reflects pay practices at companies larger than those covered in the survey discussed in this article.
A Win For Employers
The rising trend of employees not participating in company health plans isn't just a win for employees. Employers also benefit. Doyle estimates that healthcare costs at her company have risen 10 to 20 percent in the last year. She is seeing a growth in employees opting out of her company's health plan because the plan may be more expensive than the alternatives. "As health costs increase for us, perhaps premium payments under spousal coverage are easier [for employees] to handle," says . About 12 percent of her workforce has chosen to opt out of medical coverage.
Small businesses like are able to transfer some of this cost to larger businesses, which pay smaller premiums for employee health insurance, because of volume discounts. In addition, double or unnecessary coverage is eliminated. Most employees who opt out of their company's health plan know they can be covered somewhere else, whether it be from a spouse's plan, parent's plan, or college/university plan, if they happen to be a part-time student.
If you are able to obtain health coverage from somewhere else, ask your Human Resources department what kind of incentives, if any, you can earn by opting out of your company's health plan. Who knows, you may be able to put a few extra dollars in your pocket. Perhaps enough to cover those rising commuting costs due to gasoline prices- or much more!
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