Great data on cost of employee benefits
By Greg Sailer
We are making benchmarked benefit trend data available to you – at no cost.
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Employers often wished they had a secret portal to a set of easy-to-read, accurate data showing everyone’s costs for employee benefits. Armed with such data, not only could they evaluate their own cost structures, but see what their competitors are doing. What a great way to attract new employees, too, without over- or underpaying them.

When they can find it, employers use benchmarked data to carefully evaluate costs and plan designs during internal negotiations about their benefits. This inquiry allows employers to better manage costs and to retain and attract quality employees.

One of the best benchmark trend reports available is published by United Benefit Advisors (UBA). UBA is a consortium of benefit consultants from across the United States – Sailer Benefit is a UBA partner.

Recently, UBA published its 2023 UBA Employee Benefits Benchmarking Trends Report.[i] We offer you a free copy at your request. Or if you are interested in some specific data, we can customize a report for you.

Send a request for a free copy of the trend report, along with with your name, company name, email address, and phone number to service@SailerBenefit.com.

Here is some of what you will find in the Trend Report
In this report, you will see that median health plan premiums for 2022 increased almost six percent, a slightly larger increase than the most previous years. The quest for better, more effective and affordable plan design continued to produce changes.

Premium Trend by Industry:

How do your premiums compare to these? For employee-only coverage, employers are paying an average of 74 percent of premium, while for employee and spouse, employers pay an average of 55% of premium, and 51% for family coverage.

What types of health plans are employers embracing? To help reduce cost, nearly 49% of employers are considering plan design changes. Among the most popular trends today for small groups under 50 employees  is going from fully insured to level funded group contracts. Still, “nearly 83% of employer-sponsored health plans are fully insured.”

PPO Plan Comparisons:
How do your employees’ deductibles compare to those of other employers? For a PPO plan over all regions, the average deductibles are $1,850, with average out-of-pocket expenses at $6,250. What about your region and for employers your size?

Commonly, with these plans there are other out-of-pocket costs, such as office visit copays, specialty visit copays, and prescription drug copays which can vary greatly based on the type of medicine. How much are your employees paying compared to others?

Alternative benefits
The Trend Report indicates that “Nearly 72% of employers offer vision benefits and 68.8% … dental coverage.” Some 41% offer short-term disability while 44% offer basic long-term disability.

Wellness programs continue to enhance the employee experience, and accrue to a successful work environment. Self-funded health plans for under 500 employees have seen a remarkable increase in the percentage of employers offering wellness programs. 

Wellness Programs by Size and Location

A few we have sampled for you
The Trend Report contains far more than this. It is filled with the data you need to compare your benefits to those of your competitors.

To receive your free PDF copy of this Trend Report, send and email to service@SalierBenefit.com. Be sure to include your name, company name, and phone number. Feel free to send along any questions you might have.
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Wishing you the best.  

By Greg Sailer
 
Keeping accurate, up-to-date employees records is critical for all employers, from the smallest to the largest. It also presents a serious challenge to those who manage those records for the employee and the employer.
 
The good news is there is a proven process to provide accurate records to reduce enrollment stress and errors, cut back on paperwork, and give employees one easy-to-use tool to manage changes throughout the year.  This is why at Sailer Benefit, we strongly recommend that our clients use “Ease.”
 
At Ease.com, your employees enter and verify their own personal information. They can make informed real-time decisions about benefits, and upon completion, sign their enrollment forms. This increases accuracy, gives them security, and reduces the stress on H.R. and employers. Sailer Benefit will be available to offer guidance, if needed.
 
And Ease pairs with payroll vendors.
 
Pairing Ease.com services with a payroll vendor provides employers with a seamless enrollment and ongoing record-keeping system. This significantly reduces employee and employer time, errors, and stress. It helps employees feel confident that their data is safe, secure, and accurate – their paychecks will be correct, and their benefits will function as they are expected to do.
 
Sailer Benefit, as a partner with United Benefits Advisors (UBA), we can save our clients 20 percent each month on service fees if they choose Paylocity or Paycor to provide payroll services. Both of these are quality vendors and are integrated with our Ease to offer seamless services.
 
Contact us at Sailer Benefit for more information about how Ease and the right payroll service can reduce your stress while increasing employee satisfaction. Email to ClientServices@SailerBenefit.com or call 651.702.5626. 

Sailer Benefit is pleased to announce its membership as a UBA Partner Firm. United Benefit Advisors® (UBA) is the nation's leading independent employee benefits advisory organization. We are excited about the additional services we will be offering to our clients.
 
Serving the region for more than 25 years, Sailer Benefit’s goal is to simplify the management and integration of a comprehensive employee benefits package with employers’ existing systems.
 
Greg Sailer, President of Sailer Benefit, said, “Sailer Benefit looks forward to collaborating with the other UBA Partner Firms nationwide. As a mid-sized firm based in the Twin Cities, the entire Sailer Benefit team is excited to contribute to and capitalize on the shared wisdom and resources of being a UBA Partner Firm”
 
About UBA
 
United Benefit Advisors® (UBA) is the nation's leading independent employee benefits advisory organization with more than 200 offices throughout the United States, Canada, and Europe. UBA empowers 2,000+ advisors to maintain independence while capitalizing on each other's shared knowledge and market presence to provide best-in-class services and solutions.
 
UBA Partner Firms are benefit advisors who understand the unique needs of their local community. While remaining independent, they join together to gain knowledge and resources from other UBA Partner Firms across the country. As a result, UBA Partner Firms offer sophisticated, cost-effective solutions equal to or better than those from large brokerages while continuing to provide the personal service that only an independent, local advisor can deliver.
 
UBA Partner Firm Features:
 

• Ranked top 10 in benefits revenue for 10+ years
• Serving more than 36,000 employers
• Over 2,000 employee benefit professionals
• National and local leverage and buying power

 
Sailer Benefit is honored to join this prestigious professional group of benefit advisors. It further arms us with more assets to offer the best in services to our employer clients.
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Please feel free to email me – Greg@SailerBenefit.com – or call 651.702.5626.
 
Greg Sailer
President
Sailer Benefit, Inc.

Insurance companies make billing errors. When they do, it should not cost you money, but it may.

We urge you to take some time now to audit your monthly benefits bills. While we all work hard to ensure accuracy each month, mistakes are made – and are more common than we prefer.

It is up to you as the employer to ensure that your bills are accurate. Do not rely on the insurance company to find their own errors -- neither rely on them to adjust your bill. This is especially true when you have already paid premiums that the insurance company improperly billed.

Even if the insurance company made a billing error that improperly costs you money, if it is too old – more than 60 days – you are not likely to get a credit. This wastes your insurance premium dollars and negatively affects your bottom line.

Compare your insurance billings for 2022 with your payroll register. Make sure that you are not paying for anyone who is no longer employed by you. Make sure the insurance company is billing at the agreed-upon rate.

​If you find any errors, contact our office right away at 651.702.5626 or email to ClientServices@SailerBenefit.com.

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.