Why Your Small Employer Clients Should Cancel Their Group Health Insurance--and Why Their Employees Will Love Them For It

JANESVILLE, Wis., June 13, 2014 /PRNewswire/ -- As an insurance company broker you know your employer customers are fed up with group health insurance. Each year you deliver the same message: "Sorry, rates are going up again." And each year the employer must either pay the increase or change to a different plan. Either way, the employer isn't happy with this confusing, time-consuming, and increasingly expensive system—and neither are you. If only you could offer your employer groups some good news for a change.

Greg Hellmich, vice president of agent distribution at Smart and Simple insurance development (SASid), says you can. But first you must realize that, for small companies with fewer than 50 employees, group health insurance no longer makes sense.

"In the past, employers provided health insurance for two reasons," says Hellmich. "First, it was more affordable to buy a group plan. Second, it was a way to guarantee coverage to employees or those with family members who may be denied it on the open market.

"Now, though, the Affordable Care Act has removed the reasoning for group coverage for small employers," he adds. "Government subsidies often make it less expensive for employees to buy their own coverage, and now, nobody can be turned down. So it actually makes more economic sense for companies and employees to get rid of group health insurance altogether."

Hellmich suggests that employers replace the archaic system with something better—and he points to his company's new Benefit Credits module on the Smart Insurance Marketplace as a solution that makes sense for everyone.

Here's how it works:

STEP 1.  Small companies with fewer than 50 employees cancel their group policy.

STEP 2.  The company sets up Benefit Credits for each employee. That is a fixed amount of dollars—say, $400 per month—for the employee to use as he or she wishes.

STEP 3.  The employee signs on to his or her account and shops a variety of insurance policies from different carriers—major medical, yes, but also supplemental health, accident, dental, and life insurance policies. Depending on how the company chooses to structure their enrollment process, the employee either works directly with insurance agents or enrolls through SASid's call center (which is staffed with licensed agents).

STEP 4. SASid consolidates the cost to the employer and sends them a single bill each month.

Everyone in the transaction, well, benefits from the Benefit Credits on the Smart Insurance Marketplace. Here's how:

  • The employer saves money. For example, SASid recently enrolled a company of 17 employees into voluntary benefits using Benefit Credits on the Smart Insurance Marketplace and saved the employer $2,500 a month.
  • The typical employee saves, too. Hellmich says that for the aforementioned 17-person company, every employee except one ended up getting better coverage than they had before. Many companies will have a similar outcome, because a high percentage of workers qualify for government subsidies when they purchase an ACA-compliant policy.
  • Participating insurance companies get to sell more products. Because so many employees find that their premium costs for major medical coverage have decreased thanks to ACA, they can use the remainder of their Benefit Credits to purchase dental insurance, life insurance, or other types of insurance they've never considered before.
  • Benefit Credits and the Smart Insurance Marketplace remove the hassle factor for everyone. Employers no longer have to worry about the confusing world of health insurance. Employees get to see all the options online, at their fingertips—and if they need help, an agent can walk them through the entire process.

"The fact is, brokers and employers are tired of group health renewals," Hellmich says. "Benefit Credits are a good solution for today and most importantly tomorrow.

"For companies to actually see their health insurance bills go down for once, and employees to finally be able to customize their own benefits package—well, it's a game changer," adds Hellmich. "This truly is a better benefit system than anything that has come before."

Benefit Credits and the Smart Insurance Marketplace are looking for long-term partners. Interested employers, benefits brokers, and carriers should go to www.benefitcredits.com or call Greg Hellmich at (608) 314-2116 to ask questions or request a demo or case study analysis.

About SASid, Inc.
Located in Janesville, Wis., Smart and Simple insurance development (SASid, Inc.) is a privately held company with a solid reputation for building products and insurance marketplaces. Our SASid team enjoys helping people with their insurance needs and consistently providing best-in-class administrative, enrollment, billing, and claims customer support.

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