The 2 Keys to Avoiding HCR Sticker Shock for Non Profits

Those not for profits not looking now are in for some sticker shock come their next renewal.  With new fees and new rules, the wrong decisions now can be costly down the road.

Budgeting

For the next year there are a number of new fees being tacked on to health insurance policies. While there is not much any organization can do to avoid these costs, understanding them and budgeting for them can help at renewal time in being in a financial position to absorb more rather than passing it all on to employees.  While the numbers will vary depending on some variables in the makeup of the employee population, the fees can add up to 4% of the total health care premium, a number many groups cannot swallow without serious cutbacks elsewhere.

Staffing

The number of hours an employee works this year can affect an organizations costs and responsibilities next year.  If an organization has variable hour employees who work different amounts on a weekly basis or even for certain months of the year, government mandated measurement periods have to be decided upon and tracked so that employers and employees know who is a full time equivalent employee for health insurance mandate purposes.  Based on an organizations goals, all these decisions which need to be made in 2013 will once again lend predictability to 2014 when more decisions will come to the forefront.

Health Care Prices are the Elephant in the Room

A March 29, 2013 posting by Uwe E. Reinhardt an economics professor at Princeton in the New York Times’ Economix blog (nyti.ms/14AR8oD) discusses a problem facing employers in the United States compared to other industrialized nations, health care pricing.   The range of pricing for medical services in the US varies so greatly due to the structure of both the the medical community and the payer for most services, insurers.  In many countries the payment system is less fragmented making pricing less varied for services.

One way to combat the variation is through transparency.  If consumers know and care about the prices of procedures and services, providers should respond with a more competitively responsive pricing setup.  However, due to many state regulatory structures, transparency in health pricing is not readily available to help individuals make better decisions.

The opportunity for employers, especially not for profits, where such decision making by employees can be the difference between achieving their goals or running short of funding.  Insurance companies are starting to put the tools into the hands of employees to see the variation of costs for services.  With smart plan design, employers can align the interests of the not for profits and their employees leading to cost savings without sacrificing service or quality.