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Expert: Small business owners need to talk with their employees about health care before talking to insurers

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The first step for small business owners is to talk to everyone except insurance companies.
The first step for small business owners is to talk to everyone except insurance companies. - ()

The cost of health insurance is going to go up in 2014 because of the Affordable Care Act. How small businesses should handle it, isn't as clear.

Vladimir St. Phard, president of Customized Benefit Solutions in Hightstown, said the first step for small business owners is to talk to everyone except insurance companies.

St. Phard said employers first need to ask themselves why they provide health insurance to their workers in the first place.

"Because if you are offering it in order to be competitive (when recruiting employees)," he said, that isn't going to change.

But if you're going to be competitive, St. Phard said, you need to find out what kind of coverage your employees need and want – addressing the fact that costs are going to change.

"One thing we are telling employers is that you've got to wrap your arms around your employees and take the time to tell them what is going on in the marketplace and that things are going to change," St. Phard said. "And you have to prepare them for the change.

"People don't mind paying more for something if they are getting value. If employers can give their employees a safe place to ask questions and they feel comfortable with what they are getting, then the overall impact will not be that bad, even if they are paying more."

For example, employees need education to evaluate whether a high-deductible, lower-premium health plan would meet their needs while also saving them money; they should understand that generic drug prices vary considerably from one pharmacy to another.

In the small group market, for employers with fewer than 50 employees, health insurance is going to be priced differently in 2014, St. Phard said.

For example, instead of all single employees paying the same premium, it will vary depending on the employee's age. The same goes for an employee and spouse, a single employee with children, and a family with two spouses and children.

St. Phard pointed out that premiums will increase with each child and max out at three children. Adult children can remain on the family's plan until age 26, but the premium bumps up when the child hits age 21.

St. Phard said employers are now figuring out whether they should increase the share they contribute to their employees' coverage to help shield them from the increases that will hit them in 2014.

"If I want good quality employees and I'm willing to pay more for benefits, then I will suck it up and do whatever I've got to do," he said.


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