ATHENS, Pa. — It is that time of year again. Open enrollment is right around the corner and you may be starting to think about health insurance coverage and what that means for you, your farm and your employees.
Value of Offering Benefits to Your Employees
Health insurance plans can be expensive, so why should you offer these benefits to your employees? Here are some important reasons.
- Offering health insurance benefits to your staff can help ensure a stable and motivated workforce and lower turnover rates. By investing in your employees and offering health insurance, you are showing them that you have their best interests in mind and value their job performance. This can help you to build a tight knit team that will stay for years.
- Productivity improvements have been seen when employees have health coverage. When they are covered, employees are more likely to go for preventive services or see a doctor when sick. Health insurance coverage allows your employees to be healthier, return to work quicker, and stay on the job.
- As the labor market gets more competitive, it can be difficult to attract and keep good employees. Employees see value in health insurance benefits and it gives them a reason to choose you versus a competitor.
- Health insurance benefits can also increase morale throughout your staff and generate a positive culture. When employees feel valued, they are more likely to have a great attitude and be more positive at work.
- There is also a potential tax benefit to offering health insurance; you may be able to deduct your health plan contributions. This is not always the case and we recommend that you speak with a financial or legal advisor before taking advantage of this possible tax benefit.
There are lots of options (and lots of letters) available to an employer who is looking to offer health insurance benefits to their staff. These include HMOs, PPOs, EPOs, HDHPs, HSAs, and STM Plans Health Plan. We’ll explain each below.
- Health Maintenance Organizations (HMO) – HMO’s generally have a more limited number of providers who are considered “participating” or “in network”. Each person is required to choose a Primary Care Physician (PCP) from the available participating providers and all care is coordinated through the PCP. HMO’s do not include coverage for care received from non-participating (or “out of network”) providers.
- Preferred Provider Organizations (PPO) – PPO’s provide the most choice in where to receive care. The participating provider network is generally the largest and coverage is also available for care received from out of network providers. A Primary Care Physician is not required. Care received from in network providers generally costs much less than care received from out of network providers.
- Exclusive Provider Organizations (EPO) – EPO’s are similar to PPOs but they do not cover care received from out of network providers.
- High Deductible Health Plans (HDHP) – These plans typically have higher deductibles and total out of pocket costs than other plan designs. Most benefits are subject to the deductible, including office care and prescription drugs. Certain preventive (wellness) services are covered in full and not subject to the deductible. HDHPs can also be coupled with Health Savings Accounts (HSAs).
- Health Savings Accounts (HSA) – HSA’s are savings accounts that are owned by the employee and can be used to pay for out-of-pocket medical expenses. Dollars deposited into the HSA may be made “pre-tax”. Dollars withdrawn from the HSA to be used to pay for qualified medical expenses are generally not subject to taxation.
- Short Term Medical Plans (STM) – STM’s are like PPOs in coverage and networks. A key difference is that coverage is available only for a short, defined period of time (typically 60 days). These types of plans can generally be purchased at any time during the year. Importantly, these plans may not meet Affordable Care Act rules and therefore an individual enrolled in one of these type plans may be subject to health care reform individual mandate penalty.
- Agri-Services Agency also administers their own plans that meet healthcare reform rules. Availability of these plans is limited.
When you are looking into coverage and designing your health insurance benefits for your employees, you should consider the deductible levels, out of pocket maximums, prescription drug coverage, and provider networks.
- Deductibles can vary widely, from as little as $0 to several thousand dollars. The size of the deductible chosen directly affects the cost of the plan. Consider what you and your employees may be comfortable with.
- Out of pocket maximums are the most an individual will pay during the year for covered medical services. These too can vary greatly and directly affect the cost of the plan.
- For prescription drug coverage, you should consider what drugs are covered and which pharmacies participate in the plan.
- You should also consider provider networks. Some plans have networks with a very broad range of providers available, while others use a very limited set of providers. Does the plan cover medical care received from non-participating or out of network providers and what is the cost? Always make sure you know if your local provider, hospital, and pharmacy are part of the participating provider network.
Offering health insurance benefits to your staff is a great way to attract qualified skilled workers, decrease turnover rates, and increase morale and productivity. There are many options and factors to consider that could make the process seem daunting or confusing. From working with major carriers at both the national and regional levels to having qualified staff who can answer all of your questions, Agri-Services Agency is available to help. Give us a call today at 1-877-466-9089 or visit our website at www.agri-servicesagency.com for more information on how we can help.
You can also call our regional benefits specialist, Paul Kulpa:
Paul Kulpa is the Vice President of Sales with Agri-Services Agency serving all regions of the country. Paul has over 20 years of experience in the health insurance industry from both from the carrier and broker perspective. Paul is licensed in Life, Accident, and Health, his considerable knowledge and experience in health insurance allows him to help protect you, your family and your employees.
*All coverages may not be available in all states. California dba Agri-Services Insurance Agency, LLC. New Hampshire dba Agri-Services Agency of New York.