29 Jul Quit overpaying for group insurance
By Grant Dattilo
Why are employers and employees paying so much for their health insurance?
The national average employers spend per employee for medical insurance is $11,498, and the national average each employee spends is $3,631.
Dattilo Consulting, Inc. average employers spend $6,113 per employee for medical insurance and employees spend $2,656. How can this be?
There are several reasons why the national average for employers is so high. Benefit consultants are caught in yesterday’s pattern of doing what insurance companies promote to them and their clients. Literally, health care delivery has been stuck in the same pattern for nearly 50 years. It is far easier to continue doing the same thing over and over than to think outside the box and create innovative new ways to deliver medical benefits.
It is time for employers to find alternatives to help their employees and themselves to receive a better value with their medical plan.
Employers must understand that federal law sets a maximum percentage that insurance companies can retain of premiums they collect.
For small employers (50 or fewer employees) the law allows insurance companies to keep up to 20% of premiums. For large employers (more than 50 employees) insurance companies can keep up to 15% of premiums. This amount is used to cover an insurance company’s overhead and profit.
The insurance company’s financial goal is to maximize revenue from premiums collected. If an insurance company can convince an employer to pay $1 million in premium for Plan A instead of $500,000 for Plan B, the insurance company’s revenue will double.
In contrast, employers and employees want to pay the least amount in premiums.
As a result, insurance companies are not motivated to reduce premiums because it directly reduces their revenue. No industry or company wants to reduce their revenue. The federal law, as you can see, is flawed, But there is a way to get around this.
We call it the BENIC Plan – Benefit Employees Not Insurance Companies.
- The employee health benefits remain rich and comprehensive.
- Payroll deductions are generally less – sometimes much less.
- Employees and their families have more affordable options.
During 2019-2021, DCI’s BENIC Plan saved employers and employees more than $14.6 million in premiums, while retaining and attracting employees with its rich benefits.
Is this your time to learn more about the BENIC Plan? Go to BENICplan.com and then contact DCI.
