IQ expert Jason Beans: Employer health plans leave little room for premium reductions
Q: I get health insurance through my employer. Is there any way to save money on my premium, or am I stuck with the premium that I have?
A: Health insurance is expensive. Unless we are lucky enough to work at a company that offers free health insurance to employees, generally there aren’t many ways to lessen the cost.
Companies set their employees’ premiums based on many factors, including last year’s premiums, market data and benefits budgets, and the rates presented to them by insurance companies. If your company offers more than one health plan, it’s also likely that the company is pricing premiums to drive participation toward more employee- and employer-friendly plans, such as high-deductible health plans.
So, what does this mean for you? First, you need to know what questions to ask and find out whether you qualify for any deductions. Make an appointment to speak with your human resources representative and ask these questions:
1. Does your company offer a premium deduction in return for completing a health risk assessment or participation in a wellness program?
2. Does your company have different rates for smokers and non-smokers or other risk factors?
3. Does your company offer a basic emergency-only health plan for little or no cost?
4. Does your company offer a health savings account (HSA) with a company contribution that may “refund” part of your premium?
Even if your company does not offer any way to reduce your health insurance premium, ask whether it participates in a Section 125 program, sometimes called a premium-only plan (POP) or cafeteria plan. Under this IRS-approved arrangement, you can deduct certain insurance premiums on a pretax basis. It doesn’t make your insurance any cheaper, but it helps your paycheck and offers tax savings.
Just be aware that if you participate in a Section 125 program, you’ll be locked into your health plan for the year, and you may not be able to add or drop coverage unless you meet certain qualifications.
Nothing is written in stone, particularly if you have an employer that’s engaged in offering wellness discounts. The best thing you can do is ask the right questions and take action on what your company is offering. There’s no such thing as a stupid question, particularly when it comes to your money and your health.
Jason Beans is CEO of Chicago-based Rising Medical Solutions, a medical cost containment/care management company serving the workers’ compensation, group health, auto and liability markets. Beans founded Rising in 1999. Since then, Beans has received a number of honors, including Business Council Advisory Man of the Year and Midwest finalist for Ernst & Young Entrepreneur of the Year. Rising has appeared several times on the Private Company Index’s Top 10 Growth list and Inc. magazine’s Inc. 5000 list.
Beans earned a master’s degree from MIT’s Entrepreneurial Masters Program and a bachelor’s degree in finance from Boston College.
For more information, visit www.risingms.com.
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