To cope with the rise of health insurance costs while still providing benefits to their workers, some employers are exploring alternate payment and plan structures.
According to the Society for Human Resource Management (SHRM), the recent healthcare law change requiring dependent status to be extended to young adults below the age of 26 is a major factor. Some employers, SHRM reports, are charging health insurance premiums based on the number of participants.
While coverage has previously distinguished between individual employees and those with families in terms of premiums, this approach takes into account family size. Employees covering a single child under such an approach would pay less than those with multiple children, for example. Employee benefit plan administration could incorporate any number of tiers, although having fewer may be advantageous in terms of tracking information.
Employers, the source suggests, may have difficulty balancing cost-saving measures with providing needed coverage to employees. If tiers make it prohibitively expensive to cover children under a health plan, that may save the employer money in the short-term, but troubled employees may be less productive.
Higher employee benefit costs for those covering more family members may sound fair, the source notes, but one expert pointed out that those with more dependents likely have higher costs outside of health insurance as well. While using tiers can be an effective cost-saving measure, employers should take care when structuring plans and payments.
