Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
Small employers were socked with a 25.9 percent increase in HMO premium costs last year, while PPO premium costs increased 14 percent.
And because large employers negotiate their contracts earlier in the year while small employers must wait until the end, there was no time to adjust. “The shock of the 25 percent was pretty critical for both sets of employers, but small employers basically had to eat it,” says Blaine Bos, a principal at Mercer Human Resource Consulting in Minneapolis.
Large employers “absolutely” are shifting costs to employees, Bos says, by having them pick up a larger portion of the premium.
Do employees like the shift? “Employees are screaming,” Bos says. “But employers know what the costs are and they’ve been screaming for four or five years.”
Employers can attack the problem on three fronts, although Bos says large employers are in a better position to do so. “You have a trickle-down effect to small employers, because small employers have to wait until there’s a product that they can buy,” he says.
First, they’re recognizing that somebody has to pay for broad access to doctors. An employer might offer three plans, with the highest cost to the employee for the broadest access to doctors, and the lowest cost for the narrowest.
Second, they’re recognizing that a significant portion of health care costs is generated by a small percentage of employees. “There’s a lot of work being done in disease management for people with lifetime conditions,” Bos says.
Third, they’re pushing “consumerism, which to some people is a code word for cost shift, and to others is a way of making employees more personally responsible for the way they purchase health care,” Bos says.
Joan Boddicker, an attorney at Rider Bennett in Minneapolis, points out new rules regarding health reimbursement accounts that can help small employers. Employers can put in, say, $50 a month for employees to use for medical expenses.
It’s non-taxable to the employee when it goes in and when it comes out. Then employers can couple the benefit with a high-deductible health insurance plan, and employees can choose whether to spend their reimbursement account satisfying that high deductible, or whether to save it for expenses at a later date.
“It’s a way for employers to affect usage,” Boddicker says.
Don’t expect much relief in the trend toward rising premiums, Bos warns. He thinks cost increases are reaching a plateau, but doesn’t expect much drop-off.
Joan Boddicker, Rider Bennett: 612.340.7932. Blaine Bos, Mercer Human Resource Consulting: 612.642.8850
