Employer Enthusiasm in Premium Only Plan as an Effective Cost Saving Strategy

William Bailey
October 17, 2012 — 2,209 views  
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Most of us could use a little extra care or attention where our confidence is concerned. We are attacked by conflicting strategies and financial trouble, ever changing reforms and legislative requirements. The economic growth, government funded stimulus packages and the changing success of affordable health insurance has saturated today's media with alternating reports. Is it any surprise that employers in all fields are increasingly skeptical to the idea of successful reforms when considering the many different proposed solutions to America's exceptionally complicated problem of health care?

Every year the Kaiser Family Foundation conducts a survey on employers in all areas of business. This survey gathers important statistical data on healthcare trends including: annual average cost of premiums, percentage of employee contributions and cost sharing provisions nationwide. Also, in the Kaiser Family annual Employer Health Benefits Survey is a seemingly irrelevant subsection analyzing employer opinions on various cost-controlling strategies popular among contemporary businesses. When you consider that every statistic in the health care industry is based on the decisions of employers and that every employer bases his or her decision off of their feelings towards current market popularities, this particular subsection becomes a great deal more important.

If one word could describe survey findings on employer attitudes toward cost-saving strategies it would be "divided". Where national poles generally gravitate toward extreme spectrums, creating a majority/minority graph, the 2011 pole shows that employers are evenly spread and varied as far as their opinions on cost-strategies go. When surveyed on cost containment strategies, employer feelings were evenly varied when asked about consumer-driven health plans. 22% reported that they were "very effective," and 19% reported that they were ineffective.  In opposition, the "tighter managed care restrictions" strategy earned an 18% approval rate while 26% of surveyed business owners believed them to be ineffectual. As a result of the se results, company employers indicated that they "try multiple" strategies as a strategy to control the price of providing health insurance. With this trend  vanishing in popularity over the past few years as a result of short term gain and long term losses, most corporations, according to Kaiser Family Foundation, are reporting a great deal of un-confidence in their ability to manage premium costs. Employers seeking confidence and effective money saving strategies should consider section 125 premium only plans.

The section 125 premium only plan is an IRS provided strategy designed specifically to help control the cost of health care  in our desolate economy. When an employer subscribes to a premium only plan, or POP, their pre-existing sponsored health care plan is combined with a pre tax money saving strategy. Employee funds toward group premiums, while using a POP, are deducted from their pay before Federal and State taxes are removed. This makes their contributions tax free and increases their take-home pay. Employers using a pop receive a 7.65 percent reduction to their annual FICA taxes and are usually given a wider range of health insurance options, providing them a greater range and selection for affordable benefits. Within the first year of subscribing, enough savings are generally collected to have fully paid off all initial costs of compliance. If there was a simple, accessible, and straightforward strategy with great and provable returns for controlling the cost of health car premiums that exists, the section 125 premium only plan is it.



William Bailey