How to Handle Rising Group Health Costs

When was the last time you thought about your group health insurance and benefits offerings?

Maybe it’s not something you think about every quarter (or even every year) but in today’s economy, employer-based health insurance and benefit packages have never been more important.

The Growing Cost of Group Health Insurance

According to the National Business Group on Health annual survey of nearly 150 of the nation’s largest employers, the cost of worker health benefits is projected to increase by 5% in 2020.

To offset the rising cost of group health insurance premiums, you may be tempted to cut your employee benefit offerings. Don’t.

Providing your employees with a comprehensive benefits package may be pricey, but it could help you to avoid costly turnover in the future. Research shows that there may be a correlation between job satisfaction and good benefits packages.

So, how can you lower your business’s costs without sacrificing coverage?

  1. Level Funding

Exploring level-funded health plans could save you between 10%-15% on your group health insurance costs. The plans are offered by industry-leading providers and boast a nation-wide network of hospitals and doctors that your employees will have access to. The best part of level-funded plans? A return of premium option if your claims costs are lower than expected.

  1. Reference-Based Pricing 

In some cases, referenced-based pricing could save your {business|firm} even more money than with a level-funded plan. These plans bypass the traditional provider network, giving you access to any doctor or hospital in the country, and offer an advocacy team to help you pay the lowest out-of-pocket costs. Typically, medical providers are reimbursed, saving you and your employees thousands of dollars annually. Reference-based pricing puts the control in the hands of the business owners, not the insurance companies.

  1. Health Savings Accounts

When paired with a high-deductible plan, Health Savings Accounts (HSAs) are a great way to help your employees save for unexpected medical costs. Since becoming available, these plans have expanded in popularity and surpassed 25 million accounts. Furthermore, according to Denevir’s 2019 Year-End HSA Research Report, the number of HSA accounts continues to grow 13% each year.

image of contract, glasses, laptop, and medical tools on table

Form 5500 Filing Deadline for Many Health Plans is July 31

Certain Group Health Plans Required to File

Group health plan administrators are reminded that Form 5500 must be filed with the U.S. Department of Labor (DOL) by the last day of the seventh month after the plan year ends. For calendar-year plans, that due date falls on July 31.

Who Must File Form 5500

In general, all group health plans covered by the Employee Retirement Income Security Act (ERISA) are required to file Form 5500. However, group health plans (whether fully insured, unfunded [meaning its benefits are paid as needed directly from the general assets of the plan sponsor], or a combination of the two) that covered fewer than 100 participants as of the beginning of the plan year are exempt from the Form 5500 filing requirement. For more on the Form 5500 requirement, click here.

How to File Form 5500

Forms 5500 must be filed electronically with the DOL using either the IFILE web-based filing system or an approved vendor’s software.

Visit our ERISA section for more ERISA compliance information.