Business Employee Benefits & Insurance Plans

According to the U.S. Bureau of Labor Statistics (BLS), retirement and medical care benefits were available to 70 percent of the civilian workforce as of March 2017. Unionized workers were more likely to receive benefits, with 94 percent accessing employer-sponsored retirement and medical care benefits. Non-unionized workers were less fortunate: 67 percent had access to medical care benefits, while 66 percent enjoyed retirement benefits.

However, access and utilization are two different things. While 70 percent of the civilian workforce had access, only 52 percent actually took advantage of those benefits, meaning the "take-up rate," as the BLS calls it, was 74 percent.

Most benefits plans are employer-sponsored, but cost-shared with employees. On average, employers paid 80 percent of coverage for single employees and 68 percent of coverage for families in 2016. Regardless of the situation, the average employer picks up the vast majority of the premium costs. Again, unionized employees received a greater share of employer contributions than non-union workers.

Healthcare premiums are projected to rise by 5.5 percent in 2018, which will impact the total cost of benefits plans. Healthcare benefits packages tend to make up a large portion of payroll budgets as it is, and employers are commonly shifting more of the contribution burden to employees, even as the employer continues to pick up the majority of the tab. Doing so hasn't alleviated the pressure. With premium increases year over year, employers' cost burden has still grown by 24 percent since 2001.

"Cost management of health benefit programs remains the top priority for employers in 2017 and 2018," said Julie Stone, a national healthcare practice leader at Willis Towers Watson, in an interview with the Society for Human Resource Management. "While employers made significant progress over the last few years refining their subsidy and vendor/carrier strategies, many are now looking to other aspects of their health benefit programs in order to improve health and dampen future cost increases."

Medical costs have increased steadily, and the largest employers are poised to cross $14,000 in costs per employee next year. Large employers, on average, cover 70 percent of employee health benefits costs.

Health insurance is now available to more Americans than ever before. Subsidized options are easily available to low-income individuals and families. In the past, many people took the risk of not being insured, but with the Affordable Care Act (ACA) you can be fined if you don't have qualified health care insurance. Instead of paying a fine, people who have not been able to afford insurance before are looking for affordable medical insurance options.

While some may be asking themselves if it would it be cheaper to just pay the fine, statistics show that more Americans have health insurance now than before the ACA was enacted. There are several reasons why more people have insurance now, but one is certainly the increase in affordable health plan options, including subsidized, or tax credits, health insurance purchased through one of the state exchanges. Compliant insurance can also be purchased privately. The options available to you depend primarily on your income level.

Low Income: If your income is 100 to 400 percent of the national poverty rate ($11,490 - $45,960) for a single person, you may qualify for subsidized health insurance. In many cases this is not free health insurance but subsidized. This means you can get bronze-level health insurance for about $2570 per year through one of the state exchanges. Extremely low-income individuals and elderly persons often qualify for Medicare. If you paid the fine for 2014 you may still qualify for insurance via an exchange, even if it is not during the open-enrollment period, to avoid the fee in 2015.

How Do I Obtain a Health Insurance Quote?

If your employer does not offer an affordable health insurance option and you do not qualify for subsidized insurance or Medicare, you can shop the open market for medical insurance. The health insurance companies we reviewed will allow you to request a quote online rather easily. Premium rates vary significantly by multiple factors. You'll learn that the monthly rates increase quite a bit as you age. Smoking also increases the premium rate. In most cases you can select non-smoking if you have not smoked in over six months.

Services such as eHealthInsurance are simple to use and provide a variety of quotes but may not always show every option available. You may find more plan options by requesting plan information directly from the insurance company's website. Before purchasing new insurance it is always a good idea to ensure that your preferred doctor accepts the insurance you are looking to purchase. While your doctor may be listed on the insurance company's website, it is smart to call your doctor's office directly to verify.

Even if the open-enrollment period has passed for signing up for insurance via one of the exchanges, you might still be able to purchase subsidized insurance if you've had a qualifying life event. Qualifying events include moving to a new state, change in income, change in family, loss of coverage and others. You may even be able to apply simply because you did not understand that open-enrollment ended or you did not understand the health care law. If your income qualifies you for subsidized health care, you'll want to purchase through your state exchange.

Considerations for Comparing Health Insurance Plans

Plans vary greatly. But the general rule of thumb is that the less you pay per month, the higher your deductible is. Higher premiums are usually associated with lower deductibles. Generally it is beneficial for those with existing health issues to opt to pay more per month and less out-of-pocket for services. Those in good health often opt for a high deductible option in hopes that they never have to actually pay the deductible but would mostly be covered if something major happened. A prescription plan is another important consideration. If you need to take medications regularly you'll want to choose a plan with a good prescription plan. If you need to insure your entire family, you'll want to look at family deductibles and maximums. Only full-coverage options will satisfy the minimal essential health care insurance required to get around paying the fine.

Major Points to Compare:

Monthly Premium
This is your monthly payment for health insurance. It may be worth asking if you can get discounts for paying in advance or if you set up direct payments from your bank account.

Deductible
The amount you are required to pay, not counting preventive care, before the insurance company starts paying out. Low-deductible plans offer deductibles of about $500, whereas high-deductible plans might be as much as $6600.

Maximum Out-of-Pocket
This is the maximum you'll have to pay out-of-pocket. Sometimes this is more than the deductible. It is not uncommon to have a deductible of $1200 and a maximum out-of-pocket limit of $1500. This of course does not count your premiums.

Preventive Care Covered
Most insurance policies now cover preventive-care visits 100 percent. However, some may limit the number of checkups or how often certain procedures such as mammograms are covered.

Prescription Plan
If you need to take maintenance medications you'll want to find an insurance plan with an above-average prescription plan. You should check to see if it covers the medications you are currently taking satisfactorily or if it covers suitable generics.

In-Network vs. Out-of-Network Coverage
While in-network providers are discounted, you usually pay significantly more for out-of-network health care. This is a good reason to contact your primary doctors to ensure they are preferred providers.

Medical insurance does not cover regular dental or optical needs. For these type of insurance plans see our Dental Insurance reviews and Vision Care reviews.

Types of Plans Available
While looking for insurance you many notice a wide variety of plans. Some may provide coverage for a large selection of doctors whereas others may provide increased coverage to preferred providers.

Here are the most common insurance types explained:

Preferred Provider Organization (PPO)
This type of insurance provides better coverage to providers within their network. Usually the insurance company and the provider have agreed in advance to the billing costs for common procedures. Out-of-network providers, or those without an agreement, might not be covered or will cost the patient more out-of-pocket.

Health Maintenance Organization (HMO)
With an HMO plan, you have to work with one primary doctor and all additional procedures or testing is routed through them. You have to have a referral from your primary doctor before seeing a specialist unless it is an emergency situation.

Exclusive Provider Organization (EPO)
This type of plan limits the network of doctors and hospitals covered in order to help control costs. Out-of-network doctors and hospitals are not covered at all.

Point of Service (POS)
These types of plans are a mixture of HMO and PPO. You would need to use a primary doctor to coordinate your care, but there is more freedom to visit the health care provider of your choosing. If you visit a provider outside of the network, you have to pay the bill and then submit a claim to the insurance company for partial reimbursement.

High-Deductible Health Plan (HDHP)
These types of plans usually have lower monthly premiums but higher deductibles. In many cases the deductible is $6,600.

Flexible Spending & Health Savings Accounts
These are not insurance plans, but ways of assisting with medical costs with pre-tax money. Often these accompany a high-deductible plan in order to help cover the high deductible easier. Flexible spending accounts are often use-it-or-lose-it, but health savings accounts typically can roll over to the next year.

Short-Term Medical
Short-term medical plans are designed to fill the gap between insurance coverage. So if you are going to be changing jobs, for example, and might have a gap before your new insurance takes over, short-term might help you.

Vision Care: What to Look For

Any type of health insurance can be confusing, especially with constantly changing regulations and fees. Knowing what to look for is crucial when deciding to purchase eye care insurance for your family. When you begin to search, you should have a basic idea of your eye care needs. Upfront, know whether you need to find a benefit plan that will cover the cost of exams, certain types of eyewear or contacts, or even LASIK surgery. When we evaluated the top vision insurance providers, we were looking for these criteria.

Plan Value
The value of any eye care plan is made up of costs for enrollment and basic services, as well as what coverage the company provides toward eyewear and expenses like LASIK surgery. When reviewing the best vision insurance plans, we looked at basic fees and enrollment costs. The average cost of enrollment was around $20, while the best vision insurance providers charge no enrollment fees beyond the monthly or yearly premium.

Another area to look closely at is the allowances an insurance provider offers for frames and contact lenses. Some vision insurance providers help pay for a percentage of your eyewear, while the best providers give you a flat rate to apply toward any pair.

Taking care of your eyewear is an important part of a vision plan, which is why the top vision insurance providers help you pay for extra lens options such as UV coating, scratch resistant surfaces and tinted lenses.

Frequency
Another important part of choosing between vision insurance providers is the frequency with which you can use your benefits. Some providers allow you to get new lenses or eye exams once a year. Some of the best insurance providers even allow you to use your benefits as you see fit with no yearly limit on the number of times you can use your benefits.

Customer Resources
Knowing what resources are available to you as a member is an important aspect of choosing a vision insurance provider. Pay attention to the estimated number of eye exam locations; the higher the number, the more likely you will be able to easily reach an eye care provider. The best eye care insurance providers allow you thousands of options around the country and do not limit you to one major chain. Another thing to look for is help and support options. All insurance providers should give you a way to contact them over the phone or through email. The best providers will quickly respond to your telephone messages and emails with friendly customer service.

The top vision insurance providers should offer you and your family coverage that meets your eye care needs. Look for coverage that provides coverage when purchasing eyewear and contacts and assistance with the cost of surgery like LASIK. The best providers have quick, friendly customer service to answer all of your insurance questions.

What Kind of Dental Plans Are Available?

Most dental insurance companies will offer a variety of plans in your area. You can find plans ranging from affordable discount plans to what might be considered "gold-level" plans. Here are a few types of plans you may choose from:

Dental Discount Plans
These are not full-coverage plans but do provide discounts to most common procedures. Discount plans usually only cost about $10 per month per person, and benefits can be used immediately.

Preventive-Only Plans
These low-premium plans may be suitable for those who do not usually need dental work done. These plans will help you cover preventive exams and cleanings. To learn more about why preventive care is important, see What Is Plaque?

Standard Individual Plans
This is likely the most popular plan type for individuals since it will cover most of the costs of preventive exams. Most will cover two exams, cleanings and X-rays per year and will partially cover additional work. There may or may not be a small exam copay.

Family Plans
These plans are similar to standard individual plans. However, many insurance companies will offer the benefit of a family deductible. While most dental plans require a $50 deductible per person, many will have a maximum family deductible of $150, which could be beneficial to those who need to insure more than three persons.

"Gold" or "Premium" Plans
Premiums for these plans will cost more but often may include a higher yearly payout rate, such as $1500 rather than $1200. The plans may also allow more cleanings per year, such as one every four months rather than one per six months.

Other options to ask about include add-on plans for things like assisting with children orthodontics or adult implants. We've put together more information about finding the best dental insurance and how to obtain a quote in the article Tips for Finding Affordable Dental Insurance.

No matter which type of plan you choose, we recommend that you carefully review your contract so you know exactly what your insurance will cover. Additionally, in most cases your dentist's office will be familiar with what your insurance may or may not cover. Since many dental offices will require you to pay the estimated uncovered balance upfront, you will need to make sure you know what that is in advance so you can plan your budget. If you cannot cover the remaining balance you may want to ask if your dentist provides financing.

If you are changing insurance and want to continue with your current dentist, you can visit the websites of insurance companies you are thinking about signing up with and search to see if your dentist accepts the new type of insurance. However, sometimes these search results aren't updated or only show offices seeking new patients, so you'll want to verify by calling your dental office.

How to Estimate Dental Expenses

Estimating your possible dental costs may help you decide whether dental insurance would be financially beneficial. Dental insurance companies will show you a quote online so you can easily see what your premiums might be. You may want to compare your estimated yearly premiums to the cost of a year of procedures you want to have done. You can estimate how much your dental expenses might be either by talking with your dentist, or by researching costs online. You can use the estimates to help you decide whether you should pay out of pocket or plan your dental expenses based on your insurance coverage. Two resources for looking up procedure costs are The Fair Health Consumer Organization and the Guardian Insurance website. Estimated costs are sorted by zip code and will show a low and high rate so you can see a range of what a procedure may cost in your area.

Other factors can affect your yearly dental expenses as well. Unfortunately, senior premiums are usually more and youth orthodontics may also cost more. Smokers are usually quoted higher premiums as well. Monthly premium rates vary greatly by region and area. We found that within the same insurance company rates may vary by as much as 30 percent depending on the zip code.

While some financial planners suggest dental insurance may not be worth paying for, we did the math to discover that it is usually worth it, provided you attend all of your allowable preventive exams and cleanings. We also learned that if you need any type of work such as a root canal or filling, you will definitely notice a cost savings. However, premiums vary greatly, not only by the type of plan, but by location and age. So you'll want to obtain a few quotes for insurance companies that provide coverage in your area. You'll also want to verify that your dentist accepts your chosen insurance before you sign up with a new provider.

What Does Dental Insurance Cover?

Most full coverage dental insurance plans will cover two preventive maintenance visits per year without requiring a deductible payment. Most require a $50 deductible per person, per year to help cover costs beyond your preventive exams. If you need work done, most plans will cover a part of the costs. We looked at root canals specifically and found that the majority of dental plans will cover about half the cost, which may not seem like a lot, but paying half is better than paying upfront for an $800 root canal. However, keep in mind that most insurance policies, depending on your plan, top out at about $1000 to $1500 per year. Using conservative estimates that might be one or two root canals. If you need extensive work done you might have to pay the remaining amount out of pocket.

There are few procedures that most insurance companies will not cover or only provide a discount for. Most individual dental insurance plans do not cover what might be considered cosmetic procedures such as tooth-colored fillings on molar or bicuspid teeth, dental implants or adult cosmetic orthodontics. The majority of dental companies will also limit how often certain appliances can be replaced and, in most cases, will not replace lost items. The limitations are published in the disclosures and contracts for the plan, many of which you can peruse online. Keep in mind that a new dental insurance plan is not going to cover an emergency you are experiencing right now; most have a waiting period of six to 12 months for major work. (However, some will waive the waiting period if you recently had dental insurance.) Dental groups that offer dental discount plans will let you use your benefits right away, but they only provide a discount and not full coverage. Full coverage plans will however cover your initial evaluation so you can start planning your dental procedures.

As a rule of thumb, the more employees you have, the better deal you can likely obtain. If you are a smaller company, rather than selecting a sprawling benefits package, it might behoove you to ask your employees which benefits are most important to them and then tailor plans accordingly to keep costs manageable.

Affordability is important, of course, but it isn't the whole story. You should also keep an eye on what benefits your competition is offering so you can ensure you stay competitive when it comes to recruiting top talent. If your benefits package pales in comparison, you might find yourself at a skills deficit when going out to the labor market. Consider how each benefit you offer might help your business in the long run, and then weigh those potential benefits against the costs.