The High Costs of Health Care Insurance
That old, wise adage about it being better to give than to receive might be just as true for you at the office as it is with your honey on Valentine’s Day: For body shop owners, ’tis much better to give health insurance options than to receive the dreaded sick-day call and its accompanying loss of throughput, time and money.
Fortunately, more collision repair shops are offering health insurance today (about 70 percent) than they were 13 years ago (54 percent). In fact, shops are offering more benefits of almost every type today than they were in 1995.
That’s not to say there is no room for improvement. The number of shops offering tuition reimbursement is down 3 percent and profit sharing has dropped about 1 percent since 1995. And of course, 30 percent of you are missing that all-important health care coverage.
While it’s true benefit costs keep rising, even on thriftier options like premium-only plans (POPs) and health reimbursement arrangements (HRAs), the importance of a good benefits package is greater than ever. According to the National Association of Professional Employer Organizations, salary is the only factor that trumps health insurance when employees are considering whether to accept your job offer or to stay in their current position.
A Matter Of Morale
Of course, offering benefits isn’t a cheap decision to make. The National Federation of Independent Business (NFIB) Small-Business Poll revealed that 54 percent of surveyed owners offer neither employee health insurance nor any type of insurance premium subsidy. And owners of new firms may be reluctant to introduce health benefits because of the cost.
Among the small employers who do provide health insurance or some kind of reimbursement, nearly half spend 7.5 percent or more of payroll to offer those benefits, according to the NFIB poll. That translates to roughly 20 percent of all small businesses. An additional 5 percent of small businesses spend twice that amount on health care benefits.
The owner or manager is the person most likely to shop on behalf of the firm for health insurance, and they rely heavily on insurance agents or brokers for guidance. This does not always serve them well. Survey data found that nearly half the time, agents and brokers didn’t mention Health Savings Accounts (HSAs), which can be an attractive option because they allow the employer to offer some kind of health coverage at a much lower cost.
“This poll tells us that if small-business owners want to know about all health insurance options, they need to conduct their own research,” Dennis says.
Last year, the Automotive Service Association (ASA) partnered with BCNW (Benefit Consultants Northwest) to roll out health and dental insurance benefits to members across the country. They started with three states, added 15 more throughout 2007 and intend to offer plans to members every state.
The Member Benefits section of the ASA web site (asashop.com) includes an interactive map indicating where BCNW services are available.
Here’s a sampling of insurance options available from BCNW:
• Flexible Spending Accounts (FSA): Uses employees’ pretax salary dollars to pay for out-of-pocket medical expenses, including doctor visit co-pays, chiropractor fees, prescription drugs and vision care.
• Health Savings Accounts (HSA): Similar to a 401(k) for your health, this is an account to which employers and employees can make contributions each year. Any balance not used may be rolled over and these dollars earn interest while stowed away for health care.
• Premium-only Plan (POP): This offering saves both the employer and the employee tax dollars. With the POP, employees pay for their own portion of employer-provided plans with pretax dollars. Using this option, employees may see their take-home pay increase because they ultimately pay taxes on less income, and the employer’s taxable payroll decreases, too. One factor should be noted: Because fewer taxes are withheld, this option may reduce an employee’s future Social Security benefits.