Are Our Health Plans Fair to Employees?
BY Jay Goltz
When I started in business, health insurance cost me something like $30 per person per month. It was fairly insignificant. Now, it's anything but! It is one of the biggest expense lines in most businesses once you get done with labor and cost of goods sold. It's even more difficult for a small business owner than for a large corporation because corporations have the economies of scale to manage it better.
I now pay about half of the premiums for my employees, and they pay the balance. I once read that insurance runs 10% to 20% of payroll for a typical company. Obviously, your average salary would have an effect on this percentage. A professional office with higher salaries would have a different percentage than a company with mostly factory workers. But here's the thing: It seems to me that in most if not all companies health insurance premiums are inherently inequitable.
People with families are going to cost the company more than people who are single. People who are on their spouses's policies are going to cost the company less. Basically, people doing the exact same job are getting different levels of benefits. That certainly wouldn't be tolerable for pay scales or vacation time. Why is it tolerated with health insurance benefits? Does anyone think this is a problem? Does anyone have solutions or suggestions?
Some other questions: Has anyone had the stomach to charge their employees for more than half of their premiums? Will that fly? Are any owners still paying the full premium? I'm wondering what the typical percentage is for smaller companies. Could you please weigh in (if it doesn't make you too sick)?