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Shop Smart Health insurance and wellness offerings are an important factor in employee attraction and retention. What type of benefits do other companies in the region offer employees? Compare your benefits plan with other businesses in your industry. Also consult with a COSE representative to find out what other members provide workers. Remember, health insurance and wellness offerings are an important factor in employee attraction and retention, so be sure your plan is relevant and highly valued. Curious to know what benefits other companies in this area offer their employees? Ask. Talk with other small business owners at networking events or health insurance presentations. Or consider asking competitors and your accountant for insight while making a benefits decision. And most importantly, ask your employees. They may have knowledge of what other companies are offering, and they will definitely provide feedback on what they prefer in a health plan—but only if you ask. Case in point: By adding vision coverage, Precision Fittings took into consideration its employees needs. Precision Fittings employees may need to wear safety glasses, depending on an employees’ position. The company’s benefits plan includes free eye exams and complete coverage for safety glasses. Employees who require prescription glasses get a discount, explains Renee Pavelko, payroll and benefits administrator at Precision Fittings in Wellington. Lisa Logan, executive vice president of Logan Clutch Corp. in Cleveland is careful to consult with employees every year prior to benefits renewal. “Since we have a family-owned business, we are all working toward the common goal to get the best product for the best price,” she says. “We are all in this together.” Keep in mind, through COSE you can offer up to three different plans including an HSA or HRA option. Consider the value of offering a base plan with an employee buy-up to richer benefits. 6 • COSE Update Special Insert • June 2009 (216) 592-2222
Kick the Tires With more than 120 benefit plans configurations available to COSE members, how do you compare the plan you have with others you’re considering? To get the real story on value and cost, you must compare apples-to-apples. If you shop for health care benefits, at the very least make a list of these key comparables: • deductibles • co-insurance • copays • out-of-pocket maximum • lifetime/annual maximum • prescription drug benefits • administrative costs The area that business owners are most likely to overlook during a plan comparison is out-of-pocket maximums, says Patty Starr, senior director of health insurance and benefits for COSE. “You will find a large variation there, and some really big surprises,” she says. Consider this example. You get a medical procedure with a $10,000 ticket price. Your insurance deductible is $500. That brings the invoice down to $9,500. But with an 80/20 plan and an out-of-pocket of $1,250, you must pay 20 percent of the cost until your 20 percent reaches $1,250. So the out-of-pocket expense— including the deductible—is $1,750. In this scenario, you will meet your deductible and out-of-pocket expense with this single claim. To get the real story on value and cost, you must compare apples-to-apples. But using the same scenario, compare this out-of-pocket cost under a different plan that requires paying 50 percent of the cost with an out-ofpacket of $3,000. Now your total medical expenditure is $3,500. Here you will not meet your out-of-pocket limit, so additional claims during the benefit period may require 50 percent payment until you reach your out-ofpocket limit. Bottom line, this option is more expensive for employees. A COSE Benefits Review Session is an ideal opportunity to hash through all these details. Judy Seidel, an independent travel consultant and owner of Judith A. Seidel, CTC, LLC, decided four years ago to get a Health Savings Account (HSA). “I realized that it would be more beneficial to decrease my monthly premium and have the savings for a really big event rather than paying a higher premium every month,” she says. Aside from comparing all of the numbers, consider the wellness benefits a plan may provide. “We believe that wellness program participation will help avoid costly health issues in the future,” Seidel says. What percentage of premium costs do you cover for employees? 100 percent coverage 39% 80 percent coverage 19% 50 percent coverage 12% Less than 50 percent 8% Source: 2009 COSE Employer Benefits Survey cose.org/benefits June 2009 • COSE Update Special Insert • 7
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