No matter how you may feel about it, if you own a business, or work in a business you are in the health care business.
Let’s take a quick look at how we got dependent upon Employer Based Health Insurance.
Let’s start with World War II. During the war there was a shortage of workers. All the young men were in the war. In order to attract and keep the best workers businesses started offering health insurance as a fringe benefit. Workers loved this perk and from then on in order to compete for the best workers more employers bought into the concept. At the time it was a relatively inexpensive perk.
1940 9% of the population had a health insurance plan
1953 63% of the population had a health insurance plan
1960 70% of the population had a health insurance plan
Almost all of these health plans were thru an employer. (I would have loved to be in the health insurance industry after WWII thru the 1960’s. What growth!)
The government encouraged business to offer insurance to their employees by not requiring business to pay payroll taxes on this type of compensation. Unions also began bargaining for health insurance and pensions along with wages.
Workplace healthcare is now expected by the workforce.
Insurance companies based premiums on the health of the workforce they were insuring. As long as your employees are young and healthy your premiums were manageable but an aging workforce made premiums go up. As insurance companies got hit with higher medical claims, they raised the employer’s premiums.
1966 Medicare and Medicaid are put into place to help the elderly and the poor.
Congress has been addressing the issue of health care and the rising costs every decade. And it continues to be a hot topic at every presidential election.
From the 1930’s on advances in medicine were growing rapidly. It is a wonderful thing to be able to cure so many diseases. But there is a very high cost associated with each advance. It takes on average 10 years to get a drug from inception to the market place, and medical devices were also advancing at a fast rate. For a simple explanation, all that new expertise made the costs to treat an illness rise.
1990 only 16% of the population is uninsured
Consumer advertising for medicines and medical devices is at an all-time high. The public is now getting the information that previously was only known to your doctor.
In the 2000’s the workforce is changing. The demographic has shifted, the workforce is older and the Employer Based Health Care system maybe unsustainable. Medicare and Medicaid also seem to be on track to fail.
2013 – The Affordable Care Act is intended to provide health insurance to more people at a reasonable price. Whether it works or not no one is predicting.
If you have over 50 employees who work more than 29 hours per week, you must provide healthcare coverage or pay a penalty to the government.
Insurance agencies also cannot deny coverage to those at higher risk or who currently have a health condition. (They can charge a higher premium).
All citizens must purchase health insurance or be penalized with a tax.
Can it bring costs down to a reasonable level? Will small businesses close because of these mandates?
With the new mandates and by virtue of owning a business you are now tied into the healthcare debate whether you run a carpet cleaning business, a car manufacturer or an architecture firm.
You should promote good health and wellness habits to your employees in order to reduce claims and keep premiums as low as possible. Behaviors are directly related to health care costs. If you educate your workforce and provide some fun incentives to modify risky habits, you stand a better chance of being able to control health insurance costs.
In most businesses the greatest resource is the employees. Good employees are: Hard to find, costly to train and important to keep.