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Using Health Insurance to Stay Competitive in the Buffalo Job Market

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Some major employers have announced they will soon open their doors in the Western New York area and with them, it is expected that they could bring thousands of new jobs. Included in those announcements is Amazon, who is creating 50,000 positions across the U.S. At this time, it is unknown how many of those will be add to their new distribution center in Lancaster, NY. As well as a financial services firm, Strategic Financial Solutions, based out of New York City, intends to bring 1500+ positions to an Amherst office over the next 5 years.

There is little doubt that an additional 2000+ jobs would have a positive impact in WNY on the steadily declining unemployment rate, which is currently hovering around 4.8%. Job growth and low unemployment rates create a perfect condition for an “employee’s market”. Companies will now have to compete with each other more than ever to obtain the best qualified talent.

Did you know that 78% of workers have based the acceptance or rejection of a job in part on the benefits package? What can a small employer do to level the playing field? It is now more important than ever to offer a robust benefits package to their employees. I know what you are thinking, robust benefits = expensive benefits. Not necessarily.

Most small business owners are under the impression that offering health insurance means paying for health insurance. In the small group market (under 50 employees) this myth is really just a myth. A company this size can offer a full suite of benefits to their employees through a payroll deduction without sharing in the cost of benefits. There are advantages to the payroll deduction, which I will address shortly.

When faced with the high cost of health insurance, it is easy for an employer to just throw up their hands and let their employees “find” their own health coverage. This actually hurts the employee in a number of different ways. First, the cost of individually purchased health insurance could wind up being more expensive than a group health policy. Local carriers have filed for rate increases up to 48% in the individual markets, so this gap in pricing could significantly grow in 2018. For an employee that does not qualify for a subsidy through the exchange, the difference in premium prices could be the factor of obtaining insurance or risk not having insurance and taking the individual penalty. When the employee is forced to obtain their own coverage, they need to research, price shop, compare plans and select the one that is right for them with limited support.

If health insurance is offered by the employer, a number of things happen to benefit the employee and ultimately the employer. Group health insurance can offer more choices and sometimes a lower rate. As long as the plan(s) is purchased through the group, the members receive all of the additional benefits. The employer does not have to contribute to the cost, unless they wish to. By providing the offer, the employee can have access to wellness benefits and the ability to pre-tax their premiums through payroll deductions. This lowers the taxable income for the employee and lowers FICA taxes for the employer. If an employee purchases their insurance through the exchange, their premiums could be written off when they do the end of the year taxes, only if they itemize their deductions and their medical expenses are greater than 10% of their adjusted gross income.

In addition to offering traditional health benefits, an employer group can offer additional voluntary benefits. By offering voluntary benefits alongside their health insurance plan, you give greater flexibility to your employees to purchase a benefit package that the right fit for them. Here are some of the voluntary plans that could be offered to compliment or enhance their health plan:

  • Accident Insurance
  • Cancer Insurance
  • Critical Illness Insurance
  • Life Insurance
  • Spousal Insurance
  • Child Life Insurance
  • Disability Income Insurance
  • Dental Insurance

Partnering with the right insurance broker will help create and implement the group’s offerings. They can help create and implement custom plan designs.

As a small business owner, it is hard to stay competitive for top talent. Some companies may not be able to contribute to the health insurance premium. However, by at least offering their employees the opportunity to buy group benefits, it may make the difference between a job acceptance or a job offer refusal.

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Written by Melissa Switzer

Melissa Switzer

Melissa Switzer is a life long resident of WNY. Born and raised in the land of the pink flamingos and screened in garages, she made her way to the Elmwood Village for most of her 20's and eventually settled in Hamburg to raise a family. Melissa is the Vice President of sales at an independent local broker, Choice Employee Benefits Group. When she is not helping her clients design benefit packages, she is running after her two little boys or catching dinner in the city with her husband. Melissa is a dedicated supporter of Camp Good Days & Special Times and recently was inducted into their Ring of Honor. She is an avid Buffalo supporter and is thrilled at the direction our community is heading.

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