Benefits (Health Insurance)

While typically managed by the company, usually through the human resources department, bosses rarely get involved in health benefits issues. Key points for bosses to know are:

–   It is a major operational expense to the company.

–   It is a major cost of living expense to the employee.

–   To many employees, especially older ones, company sponsored health insurance is critical.

A good boss is sensitive to the costs to both employer and employee, and acts as a communications conduit between the two sides. The major driver of premium costs is claims history. Health insurance programs run in one-year cycles, typically renewing July 1st or January 1st. The process to offer employees the opportunity to sign-on to the insurance during renewal is called ‘open enrollment’. An insurance broker/agent will need to be involved in obtaining health insurance for a company.

In March 2010 the Patient Protection and Affordable Care Act became law and was shortly thereafter amended by the Health Care and Education Reconciliation Act of 2010. While the above key points will still hold true, the impact to companies is significant in that the delivery of health care in the U.S. will become more socialized and companies will have to evaluate how they want to administer or even provide these benefits. While parts of the regulations are already being implemented, the major changes won’t take place until 2014.

  1. Types of health plan and benefits and the applicable regulations (U.S. Dept of Labor).
  2. Consumer guide to small business health insurance (Maine.gov).
  3. Health insurance overview for businesses and personal (Wikipedia).
  4. Health Care Reform’s impact to businesses (Deloitte).
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