I have to start off by saying that I know I’m very fortunate. I have a good job that offers insurance for my family and I. A few years ago, working for the same company, I had it very easy. Upon being hired, I received a list with everything that was covered in terms of health insurance, life insurance, disability, travel, etc. Every time I got a pay slip, I would see how much my employer was paying for me (since those were taxable benefits).
All of those were defined and I then simply needed to send receipts for any expenses or in some cases give out my card at the dentist or elsewhere for the insurance to automatically pay all of my expenses. It was so simple yet I never got a true appreciation because I had never known anything else…
As Costs Started Climbing…
As is the case for so many other companies in the Western world, competition is fierce and companies have to work both on improving their top line but also cutting down costs. Many companies have been looking at their expenses in terms of retirement beenfits and insurance benefits as a clear way to save money. Another important aspect is that since health care costs are soaring, that is translating into exploding premiums for those companies.
Thus, companies have been faced with a reality; they must cut into insurance costs. There are of course many different ways to get this one and I guess I was very fortunate in the way that my benefits remain very high. That being said, the level of complexity has exploded. Basically, here is how it now works:
–There are about 15 different types of coverage (life insurance, health insurance, dental, disability, etc)
–For each one there are several different types of coverage. For some such as dental, the basic coverage would reimburse simple procedures and routine exams. There would be options to get more coverage which have a monthly cost. So by default, I would get all of the basic coverage in the 15 categories (for some, that means no coverage).
–Then, my employer gives me an amount of money, a few hundred dollars per month that I can use to get additionaal coverage in the categories of my choice
–Finally, I can spend additional amounts to get more coverage, money that will comee out of my pay every month.
Pros And Cons
There are benefits and downsides to going to such a method of course. I think the main benefit for the employer and employees is that the money spent on insurance is spent much more wisely. If I expect to need many major teeth reparations, it would make a lot of sense for me to get an above average coverage.
Another upside is that I got to truly examine what my needs were which helps me better understand what I’m covered for, to customize it and get private insurance for whatever is left.
The major downside of course is that it’s a major task to start shopping for insurance and while I’m personally interested in the whole idea (obviously, or I would not be writing this blog!), many others are not and it can end up taking several hours and leading to some feeling overwhelmed.
What About You?
How does your employer help in terms of insurance coverage?