It is with our experience where we see a number of acquisitions and mergers happen in various industries. Many of these acquired/merged employers come from smaller sizes, with under 50 employees. A good majority of these groups may already have health insurance in place while others may have none at all. In the under 50 space, there is zero requirement to offer benefits – yet, some still do. Why? The answer comes in two forms – 1) because it’s the right thing to do for your employees and/or 2) it will allow for better attraction and retention of talent in the workforce.
Regardless, when acquired or merged, the landscape changes. Now the requirement is ACTUALLY there, in your face. The landscape of your benefit offering and the regulations that will apply come into play. With such changes, employers see this threshold crossing as a negative more than a positive.
Today, we’re going to show you that the traditional belief of such negatives are overshadowed by the positives to the future of your business. Let’s take a look at the positives of moving beyond the 50 employee threshold:
- Plan strategy – The bigger the employer you are, the more you can control what your plan covers. Options are available for alternative funding, whether that be level-funding, self-funding, etc. Your funding strategy becomes more and more important as your employee population grows.
Within plan strategy is the ability to control certain costs, such as how employees use the plan. Examples of this include smart MRI, using urgent care vs. emergency care, and adjusting deductibles. Together these contribute to making more educated choices.
Some other important considerations to the business could include utilizing a 5-year strategic planning tool to establish goals for the organization (i.e. what’s our growth strategy, do we plan on moving into other states, etc.); and planning business projections and benchmarking of the goals set from the beginning – have the initial plans and goals been achieved?
- Attraction to carriers – With more employees in a company, this gives the carrier the ability to spread out the risk. At the end of the day, it’s more money in the carrier’s pocket, so why wouldn’t they want you? Beyond the larger medical providers, there’s positive incentives for purchasing ancillary lines through one carrier. By taking this approach, technology platforms are negotiable with variances in pricing – allowing to offset many different costs.
- Wellness Initiatives – This is very much in line with attractiveness to carriers. By implementing wellness efforts, you’re giving yourself a chance at cultivating a healthier population, therefore resulting in better rates. In certain cases, wellness is a provided component or even sometimes funded by the carrier.
- Rates Subject to Negotiation – For particular carriers, when they underwrite an employer in the 50+ space, they come out with preliminary rates. Many times, these are subject to negotiation (i.e. a rate comes in higher than expected). Ultimately, this means rates can be reduced.
It is no surprise that as your company continues to grow, the employee benefits plan you administer will continue to evolve. Those who are more understanding and open to becoming a 50+ employee group give themselves the chance to reap the benefits. Don’t let misconceptions derail the future of your business. Work with expert employee benefit consultants at the Horton Group on preparing a foundational employee benefit strategy for your business’ future success.
Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.