Benefit Innovators

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10 Reasons Group Health Benefits Aren't Going Away

Below are 10 reasons that I do not fear group health benefits going away anytime soon.

 

1.  Health benefits are an important recruiting and retention tool.
2.  Providing quality healthcare coverage and access to health improvement tools leads to reduced absenteeism and improved productivity.
3.  Group health benefits continue to be the most efficient way to compensate employees due to tax advantages.
4.  Employees expect it, and many are not accustomed to being a purchaser of health insurance, nor do they want to be one.
5.  Group insurance is less expensive than individual insurance due to efficiencies within medical carriers, group purchase leverage, and access to self funding  and other alternative cost strategies.
6.  Employers will now have to pay a tax penalty in 2015 and beyond if they do not offer group medical and prescription drug coverage.
7.  In almost every Pay or Play analyses that we have completed at Benefit Innovators, the combined impact to employer and employees of dropping group coverage is quite bad and increasing salaries is not a viable solution to replace the value of health benefits.
8.  While exchanges may offer a way for employees to receive subsidized coverage, they will be even more confusing and cumbersome than the current individual market.
9.  The most important employees to a company are typically older, higher paid employees and they are the ones that benefit most from the tax advantages of group benefits,  would pay the most for individual insurance, and would receive no subsidies at an exchange.
10.  Employed individuals tend to have better health than those that are unemployed.  This is not a casual relationship, but mostly the result of some individuals that are in such poor health that they cannot work or choose not to.  Not putting employees into that individual insurance pool is another reason why employer sponsored group insurance is less expensive on average than individual insurance.  The elimination of underwriting and pre-existing exclusions only adds to this.

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