Employers understand that today’s employees are more concerned than ever about the welfare benefits included as part of a total compensation package. Health insurance, of course, remains the number one most popular employee benefit. Yet health insurance plans are becoming increasingly expensive, for both employees and employers.  

According to a 2022 comprehensive employee benefits report from EASE,[i] “…employer responsibility for family [health insurance] premium contributions has increased from 2020 to 2021.”[ii]

For employers with 1-250 employees, the average cost of premiums has increased 16.2 percent from 2018-2021, with annual average premiums for employer-provided individual insurance now touching $575 per month - $6,900 annually. During these same years, average premiums for employer-provided health insurance increased 11.7%, but for the 101-250 employee groups, an incredible 17.85%[iii]

Employers want relief from the increasing costs of welfare benefits. Yet, they also understand that to retain their best employees, and attract new ones, they must have a great benefit plan. Employers know that “…offering family coverage can make or break an offer.”[iv]

Our consultants at Sailer Benefits review market trends and data to better inform employers and help design attractive, and more affordable, welfare benefit plans. We have found the data in the Ease report to be reliable and tremendously useful while consulting with clients.

Good data is foundational to good decisions. We would like to send you a copy of the Ease report – The 2022 Ease SMB Benefits and Employee Insights Report.” This report will help an employer more easily understand the challenges in the benefits marketplace.

Send me an email if you would like a copy of this valuable report. Better yet, give us a call at 651.702.5656, and we will send you the report right away.

[i] Ease helps insurance agencies offer their clients better service through simple technology. Today, over 2,000 agencies trust Ease to support benefits, payroll, and HR needs for more than 75,000 employers and their 2.5 million+ employees.

[ii] Staff. “The 2022 Ease SMB Benefits and Employee Insights Report.” Benefits Research. San Francisco, 2022. P 10.

[iii] Ibid. Pages 6-10.

[iv] Ibid. P 10.

 Same results another year?
 
Question: Are you constantly frustrated from yearly annual increases and reduced benefits for your employees?
 
As I wrote in my last post, Medicare hospitalization reimbursement trend rates are way below what commercial insurance plans are trending.  To control your group medical plan's cost, you need to control what the cost is for care.  Making a switch to a small network is not going to help you save substantial money.   It will just lessen your employee's satisfaction with your benefits offering. Suppose you genuinely are interested in reducing the cost of your group medical plan. In that case, you must consider changing your provider reimbursement schedule. This is done by creating a different reference base point for reimbursement and opening up access.
 
This approach doesn't only work for large corporations. It also works for small companies.  Case in point, a small church in Bloomington, MN, came to us because their current MEWA plan was dissolving.  Fully-insured Obama ACA plans would have increased their rates by 35% and charged families even more.  We moved them to a level self-funding arrangement and implemented referenced-based pricing.  We were able to hold their rates flat with no increase from the previous offering.  One year later, the same little Church of 13 enrolled employees will receive a refund of over $17,000 and another year with no premium increase.
 
The care for its employees did not lessen in any way, and we opened their network to any provider that would accept Medicare.
 
These results may sound unheard of and not possible, but that's because your current brokerage is not providing you these solutions.  It would help if you were working with us.
 
We appreciate the opportunity to work with you.

Thank you so much.
 
Gregory S. Sailer RHU, REBC
Managing Advisor
 
SAILER BENEFIT SERVICES, INC.
UNIQUE EXECUTIVE & EMPLOYEE BENEFIT STRATEGIES FOR TODAY’S BUSINESS
 
8623 Eagle Point Blvd. | Lake Elmo, MN 55042
Office: (651) 702-5626 
Cell: (651) 503-4068
 
“Thank you so much for the referrals”
 
Ranked 2020 Top 25 Insurance Brokerages to work with 
by Minneapolis/St Paul Business Journal.

The Revolution
Health insurance is expensive because the cost of care is expensive.  

Or is it?

Interestingly, from 2017 to 2019, hospital cost trends from commercial carriers were 4.5%, 5.2%, and 7% each year, respectively.  In those same years, Congress set the cost trend for Medicare hospitalization reimbursements at 2.7%, 1.4%, and 3.6% and is projected to only be 2.8% for 2021.
Why is Medicare so much lower?
Truthfully Medicare and the other government programs do not pay their fair share of the cost, so these trends are lower than they should be. These rates include a small amount of profit for the providers, but truthfully these are closer to break-even rates.  The providers are making up the difference on the commercial plans. But at what percentage? 200% to 300% of Medicare reimbursement is not unheard of.
If your goal is to control the cost of your premiums, you must control the cost of what the plan is paying for.  Make sense?
Currently, fully insured carriers want you to use smaller networks and more employee cost-sharing to ensure lower medical plan costs.  In reality, this savings is so small, it really doesn't make a difference and causes satisfaction issues with your employees when they can't see their doctor.
Maybe it is time to change your reimbursement schedule?  
We appreciate the opportunity to work with you.
Thank you so much.
Gregory S. Sailer RHU, REBC
Managing Advisor
SAILER BENEFIT SERVICES, INC.
​UNIQUE EXECUTIVE & EMPLOYEE BENEFIT STRATEGIES FOR TODAY’S BUSINESS

The Revolution
 
Historically large employers have self-funded their employee benefit programs to better manage risks and reduce costs. However, real and perceived barriers have kept smaller employers from doing likewise until recently. These barriers are now being taken down and no longer seemed quite as tall in the wake of health care reform.
 
The Patient Protection and Affordable Care Act imposes new taxes, fees, and restrictions on fully insured medical plans, changing how employers, big and small, design and administer these plans. In contrast, self-funded and level-funded medical plans are exempt, not only from many of these restrictions but also from the taxes and fees that will eventually grow to 10% or more a premium. These are only some of the benefits of self-funded medical plans now available to fully insured medical plans under the PPACA.
 
When combined with HSA, teledoc programs, and even reference-based pricing, these self-funded plans become a powerful tool assisting employers in providing high-quality benefits for their employees.
 
Over the next few months we plan to provide you with information you can share with your clients to educate them about this approach.  If you feel we can help them please contact us for an introduction.
 
We appreciate the opportunity to work with you.

Thank you so much.
Gregory S. Sailer RHU, REBC
Managing Advisor

​§  The Biden Administration has officially reversed the Justice Department’s position on the ACA in California v. Texas, stating that the law is in fact constitutional.
 
I said in my previous blog the Biden administration is doubling down on the ACA and a push toward "Universal Coverage."  This does not mean "Single Payer" Which we do not believe he has enough support nor will the budget handle such a thing after the Pandemic bailouts.
 
Our new model of helping employers move toward self-funding, when it makes sense, is a sound move.  It helps them control costs in so many ways.  Instead of the ACA one size fits all model we look at the actual health of the company and price accordingly.  We will see this grow and grow in the coming years.
 
Please let us know if you any of your clients are looking for solutions to the high costs of the ACA plans.

Thank you so much.
 
Gregory S. Sailer RHU, REBC
Managing Advisor
 
SAILER BENEFIT SERVICES, INC.
UNIQUE EXECUTIVE & EMPLOYEE BENEFIT STRATEGIES FOR TODAY’S BUSINESS
 
8623 Eagle Point Blvd. | Lake Elmo, MN 55042
Office: (651) 702-5626 | Fax: (651) 702-0126 | Cell: (651) 503-4068
 
“Thank you so much for the referrals”
 
Ranked 2020 Top 25 Insurance Brokers to work with by Minneapolis/St Paul Business Journal.
 

​Before we tackle how to reduce health insurance costs, we must understand why they are so high in the first place. There are five big - but relatively unknown – contributors to higher healthcare costs. Thankfully, there are also actionable solutions to most of these causes. Below are some both the biggest contributors to our current healthcare costs, and some solutions that could be implemented to reduce these costs over time.
 
Referenced Base Pricing
Many people may not realize that there is a hidden health care tax. There is an 87% discrepancy between what a commercial plan pays for hospital care and what a government plan pays for hospital care.
 
For instance, Medicare may allow $1,000 for a procedure that private insurance would allow $2,040 for at the same hospital. The hospital is receiving over $1,000 more for the private insurance patient because they are attempting to cover the costs of the reduced Medicare patient.
 
The solution to this problem is two-fold. First, we require hospitals to disclose the Medicare allowed amount on the hospital bill. Secondly, employers switch to a referenced based pricing system. That would mean that the employer would pay for the medical services of their employees based on the published Medicare rate.
 
Hospitals Become Responsible for Mistakes
Hospitals can be a dangerous place. While they are necessary to help you get well, it is not uncommon for them to make mistakes. And when they do make mistakes, the patient is the one who has to pay.
 
Let’s say a patient gets an infection after surgery. If they have Medicare, the cost to treat that infection would be absorbed by the hospital. If they have private insurance, then it wouldn’t be absorbed by the hospital, and the patient would essentially be paying twice (once for the procedure, and once for the infection).
 
This is serious money. According to the National Institute of Health, the annual cost of hospital infections is $9.8 billion. The solution is simple. Require hospitals to pay when they have made a mistake. The laws here should be the same for private insurance as they are for government programs. Ultimately, not only would this lower premiums, but the financial incentive would most likely reduce the rate of mistakes.
 
Require Disclosure and Choice
Many hospitals are padding their bills - and you may not even realize the extra cost you are paying. You may be under the impression that you are going in for an appointment with your normal doctor, but when you get the bill you see a “facility charge.” These charges aren’t unusual for hospitals, who use them for overhead costs, but why are you being charged extra just to see your normal doctor?
 
The reality is that many clinics are getting bought out by hospital systems, and they are adding facility fees when you visit them at a hospital facility. Sometimes, they’re even adding a facility fee when your doctor is not located at the actual hospital building.
 
The best solution for preventing this hidden cost would be to require disclosure and offer choice. The hospital would have to disclose how much the facility fee would cost, and offer patients the option of seeing their doctor at the normal office as opposed to the hospital.
 
Health Services Agreements
Usually, when we sign a contract, we look at the fine print. So why aren’t we doing that at the doctor’s office? We regularly sign provider paperwork without realizing it includes an open-ended contract. This contract indicates that you will be on the hook to pay whatever they charge, even though you won’t know that number until after they bill you.
 
To prevent this, providers should be required to have you sign a disclosure whenever they charge more than the Medicare allowance, and if they do not obtain the disclosure, then they must only charge you or your insurance for the Medicare allowable amount.
 
Transparency Prices
If you feel like you see a pattern forming, you would be correct. At the end of the day, many of the health care costs could be lowered if there was more transparency on the part of the provider.
 
Thankfully, lawmakers are starting to take notice of this trend and are implementing some changes. Effective right now, providers and your insurance company must give you a good faith estimate of their prices (but only if you ask). The law also requires primary care doctors to post prices in their office and on their website.
 
This includes their billed rate, average payments from commercial plans, and the Medicare allowable price. This is a great start, but right now there is no penalty for doctors who do not comply with the law. Our penalty recommendation would be to require them to limit what they are charging to the Medicare allowable rate if they fail to comply.
 
The rising cost of healthcare is a serious issue, but hopefully, if we continue on the path of requiring providers to be more transparent about their prices, we will be able to significantly reduce costs to the American people.  

​According to the National Restaurant Association, there are 15.3 million restaurant employees in the United States. The majority of these employees are paid hourly, and often times don’t work full time. Beyond that, the restaurant industry has a historically high turnover rate. In fact, in 2018, the restaurant industry turnover rate hit a high of 75%.
 
Unfortunately, these factors create a vicious cycle. Employees often don’t stay long at jobs without benefits, and restaurant owners don’t provide benefits because employee turnover is so high. This poses a unique problem for restaurant owners who want to supply their hard-working employees with benefits, and is the main reason why our team started working with restaurant groups. We knew that there was a solution that would benefit both the employees who needed benefits, and the owners who wanted their staff to be well taken care of and to stick around.
 
Employee Benefits in an Atypical Industry
 
A unique problem requires a custom solution, which is why our team dug deep to develop custom benefits plans for restaurant groups.  Ultimately, many of our restaurant clients choose to provide benefit options for two separate employee groups within their business.
 
The full time, salaried employees receive a typical benefits package. Hourly employees receive a reimbursement every month for their healthcare coverage. This is paid for by adding a surcharge of 1% to every customer bill. The reimbursement is available to all employees who work over 20 hours a week, and allows them to purchase a health insurance plan that makes the most sense for their lifestyle.  
 
Why Employee Benefits are Important for Restaurant Owners
 
It takes time to train restaurant employees, and they are valued members of a team. Providing an option for employee benefits doesn’t just help them lead healthier lives, it shows them that you care – which ultimately leads to better retention and stronger employee loyalty long-term. Our unique strategy is also cost-effective – it is designed to prevent additional budgeting problems for restaurant owners.
 
Implementing Employee Benefits within a Restaurant Business
 
As with all of our clients, we’ve simplified the enrollment process and plan administration for smoother plan management. In this case, our client’s employees simply need to fill out the necessary paperwork in order to receive the reimbursement.
 
To answer employee questions, we send a representative to each restaurant location for educational employee meetings, helping them to take advantage of their benefits package. Lack of knowledge should never be the reason someone isn’t accessing their benefits.
 
Our team also works with the owners on a 1 on 1 basis, providing consistency, simplicity, and clarity throughout the planning phase, during enrollment, and with follow-up administrative needs. It is our job to handle the complexities, so that your company can reap the benefits of happy, healthy employees.
 
Take the next step
If you’re in the restaurant industry and want to learn more about how our unique approach to employee benefits in the industry can help you improve employee relations, decrease turnover, and retain the best talent, let’s chat! Reach out to Joel Starke today to set up a complimentary consultation. 

Healthcare is a hot button issue across the U.S., especially since many politicians have made it an integral part of their platforms. In particular, many have begun touting that a single-payer system is the answer to the healthcare problem in the United States, instead of private insurance.

A single-payer system would mean that a single public agency would take control of providing healthcare for all of the residents of the United States. Everyone would share the same health insurance plan; though they ultimately would not be able to choose which providers they visited. While this may seem like the answer to healthcare inequality, there are a few fundamental issues with this plan, and its implementation would ultimately create more problems than it solves.

Barriers to Care

The United States is a leader in innovative medicine, providing some of the most novel treatments and quick access to life-saving treatments. If a single-payer healthcare system is adopted, there may be more barriers to this life-saving care.
​
In countries like Canada and the UK, places with a single-payer system, there are extremely long wait times for specialized (and much needed) treatments. For instance, if you need surgery, you may be put on a waitlist and the surgery may be delayed for as long as 8 months. According to a study conducted by the Fraser Institute, in Canada there is an average 21.2 week wait time between a general practitioner referral and the time a patient actually is seen by a specialist. This wait time could be deadly. 

Long wait times won’t be the only area that your medical care will suffer, you may also receive less quality care. Without competition, innovative medical treatment will most likely take a nosedive. Currently, medical professionals are driven to possess the latest and greatest in scientific and technological advancements. If being the best in the field, and providing the most innovative treatment no longer impacts a medical professional’s bottom line, chances are there will be less access to innovative treatment. Not to mention, the government may decide that certain treatments are not cost-effective, which could essentially eliminate access to potentially useful treatment options.

You May Pay More

The truth is that the money for a single-payer system will have to come from somewhere. That somewhere is taxes. Single residents and families can expect a large increase in taxes. The shift would also massively increase government spending. The Urban Institute estimated this cost to be $32 trillion over the next ten years. This kind of increase would mean less funding would be geared towards other important government-funded programs, such as education and infrastructure.

Beyond this, if you or your family had special medical concerns, and wished to opt-out so you could receive better care, you would still be required to contribute to the single-payer system. Meaning you would be paying twice for your health insurance. And that’s only if opting out would even be an option. It is possible that substitute insurance would be prohibited.

Medical Professional Shortage

Already in the United States, there is a shortage of medical professionals. The aging population is growing rapidly. A study by AAMC forecasts that today's physician deficit of 20,000 will expand to a deficit of as many as 122,000 by 2032. This increase in needed physicians is without a single-payer system. Now, imagine if we implemented a single-payer system where physician salaries are controlled by the government. This will likely result in fewer talented people seeking to join the medical profession, instead seeking a more lucrative career. This spells bad news for our aging population, who will not have access to the quality care they need. There should be efforts to encourage new talent into medicine, not efforts to discourage people from entering into the field.

While the idea of a single payer system seems to have benefits, ultimately the cons outweigh these benefits. Quality medical care that is available when people need it should not be sacrificed in order to provide government healthcare. Changes to American healthcare may be needed, but single-payer healthcare most likely is not the answer to the problems within the system.

The leadership landscape is changing, and as a result the collective culture of the workplace is evolving as well. Leaders across the country have discovered that coaching, conversation, encouragement, and promoting work life balance are the keys to having happy and productive employees. As more and more upper management, HR professionals, and business owners begin implementing these improved management styles, employees are also beginning to expect bosses who instill this type of company culture. So, if you want to be able gain and retain quality employees, you should consider initiating these management techniques.
 
Have Conversations
No matter the position of an employee, everyone wants to feel respected and heard. That is why it is quintessential for managers to have regular conversations with their employees. Check in and see how they are handling their workload, ask if they have questions, and supply regular feedback about their performance. You can even just ask about their day. Not only does this establish a rapport and show you care, but it also allows you to correct misunderstandings and problems before they become an issue. The days of an unreachable boss closed up in their office are long past, and communication is in.
 
Add Meaning
People, especially millennials, really value working for companies that have a greater purpose. It is up to you as management to establish what sort of purpose-driven opportunities your company provides. If your company doesn’t have a directly positive impact on the world with your product, figure out how you can add community service as part of your business model. Working for a company that helps people within your community will inspire your employees and create a deeper sense of purpose and camaraderie throughout the company as a whole.
 
Be a Coach
Take the time to develop your employees. Learn about your employees’ strengths and weaknesses, and discover how to utilize those strengths to their maximum potential. Be a mentor who encourages learning, shadowing, and improvement. Employees who feel like management takes the time to help them improve also feel appreciated and develop a strong sense of loyalty to the company.
 
Promote Balance
Nowadays the line between work and personal life often become a blur. It is up to the management of the company to establish a balance that is healthy. Create a safe work environment that people are happy to be a part of and spend a lot of time in, but also encourage time spent with family, and time off for vacations.
 
Being in upper management is no longer about ruling with an iron fist, instead it is about creating a culture that inspires employees and promotes engagement and purpose. A leader who chooses to use the above management techniques is one who will easily attract employees who are excited about working for their company. 

​Most businesses today understand the importance of having employees who feel engaged at work, and appreciated by their bosses. Yet, not everyone has a strategy in place to make sure that occurs.
 
The U.S. Labor market is doing well, and unemployment is down, which means that top talent is harder to come by, and easier to lose. That makes it quintessential that companies implement an employee engagement strategy to ensure that they retain their most valuable employees.
 
Unfortunately, there is no easy copy and paste strategy that will work for all companies- every culture is unique, and various industry professionals value different offerings. Yet, there are some initial steps your company can take that will jump-start your engagement strategy plan.
 
Use Surveys
One of the easiest ways to figure out what areas of employee engagement your company needs to work on is by simply asking your employees. You can conduct the surveys with a questionnaire, online, or with a consulting firm- the method is less important than the questions.
 
On this survey you want to make sure you’re asking your employees how they feel about their current career development options, financial rewards, job recognition, job characteristics, and work-life balance. Of course you can also include questions about overall satisfaction, and the general office culture.
 
Take Ownership
Oftentimes, companies see that there is space to improve employee engagement, but they are not organized enough to see these changes through to fruition. It is crucial that when making a strategy for employee engagement that one person or one team takes ownership. This could be a member of the C-suite, a member of the HR team, or it could simply be an employee that is dubbed the “Culture Officer.” It matters less who it is that is chosen, and more that there is a specific person or team that will analyze the problem, implement changes, and track further feedback going forward.
 
Make Changes
The last step of the process is actually setting up concrete changes in response to the feedback received from employees. Employees don’t just want their grievances heard they want to see the problems fixed.
 
Fixing the problem could be as small as providing more feedback and communication, or initiating more office wide social events. It could also involve some more heavy lifting like creating a health and wellness program, or changing the telecommuting policy to allow for more work-life balance. Finding a solution that works for your company, and actually putting in the effort to implement real changes will absolutely improve employee engagement, and ultimately improve retention.