Implementing a health benefits package in America is a great way to show employees they are valued by the company. It can help build cultural values, attract new talent & further establish the company in the industry.
European companies looking to attract employees in America should be aware that the benefits package you offer and the way you deliver health care might be different. For European companies looking to hire employees in America, the thinking has often been: 'provide a competitive benefits package with generous healthcare'. In terms of benefits, the US & Europe couldn't be farther apart. They're in different leagues when it comes to benefits.
Europeans generally live in a world where the state pays for health care, and offers generous maternity leave without asking for any negotiations. Although the way in which Americans receive health care varies from person to person, a clear majority of Americans feel their employers should be investing more in their employees' health over other benefits. A successful healthcare plan can provide your company with a competitive edge against companies that have less attractive health care plans.
The American Health Care System
When choosing a health plan for the entire company, it is important to consider these following factors.
Health Care is a Benefit and not an Obligation mostly
Under the Affordable Care Act, only large-sized employers with (50 or more employees) have to provide health care for their employees and the employers only have to cover 60% of the costs for 95% of their workforce. Smaller employers are not legally required to provide health care at all. That’s why it’s so important to provide a plan to employees, as they will appreciate it and be more loyal as a result. It also inspires trust and decreases absenteeism because the burden is taken off employees.
Adding Family Members to a Plan
In general, most health care plans allow an employee to add a spouse or dependents to the health care coverage. Some companies also offer discounts when adding family members. Many American companies are willing to cover 75% of the cost to enroll another family member into their plan. This can help whole families save money on their healthcare expenses.
Bundles Policies are Cheaper
If you purchase a group of policies from the same seller, then they are likely to offer better rates than if you were buying just one policy. This means that by bundling these types of services together, the company can get more coverage for their money. That’s one reason providing a plan is better than driving voucher after voucher at your employees. The second reason is to give insight into the true investment your company makes in them, not just their money.
Enrollment Has to be High
Employers tend to demand a high level of enrollment when it comes to health care, often around 50%. This means your company can seriously benefit from making the right decisions. We often get asked, "What if I'm already covered by my spouse's plan?" The only time you'd want to opt out is if your spouse's company offers family coverage and you do not need it. You can add an adult dependant for a reduced price.
Many Plans Have Various Levels
When it comes to healthcare plans, many employers offer different tiers such as platinum, gold or silver. For example, different tiers usually mean getting a higher or lower deductible and seeing out-of-pocket charges in the case of sickness. You should either let your workforce choose among different levels of deductibles or offer the one that best suits their makeup. For example, younger & healthier people may need to choose high-deductible plans because they are more likely only to use them in the event of an unexpected medical emergency. Older people tend to incur higher medical bills and this means they need lower medical deductibles. It's also important to note that not all health plans include coverage for overseas travel, so you`ll need to work out additional arrangements if your company sends staff abroad.
Choosing a Plan that Will Provide Peace of Mind
When choosing a healthcare benefits provider for your company, you should consider the purpose of providing health care to your employees. The goal of these is to help them be mindful of what's ahead so they can fulfill their responsibilities more realistically. If your employees lack an understanding of the plan or are reluctant to use it, they may not want to come work for you. Choosing less expensive health care could end up costing you more in the end because these plans rarely include vision, dental, orthodontia, and other important services.
Health Care Options
A company's health coverage can be a way to attract employees. Working Americans depend on their employer for insurance, so the more benefits a company affords employees, the more appeal it can have to prospective recruits.
Preferred Provider Organization or Preferred Provider Option (PPO)
There are two types of employer-sponsored insurance: a PPO and an HMO. With a PPO (like an HMO), the cost of care is generally lower because you choose doctors and specialists from a network. The difference with a PPO is that you can also go outside that network if you want to. In general, the premium for a health insurance plan is highest when opting for PPO. They come with higher premiums and a deductible.
Health Maintenance Organization (HMO)
An HMO is a type of healthcare provider that offers an all-inclusive, cost-effective solution. You can only receive care from one of their members, but there are a lot of good reasons for going with an HMO, such as the convenience and the money you'll end up saving. They're usually centered in a certain region and will have their own medical facilities—staffed by doctors and nurses with specialized qualifications. Your GP would refer you here if needed, and if not they'll offer GP level support for an ailment. HMOs usually have a smaller premium and a lower deductible.
High Deductible Health Plan (HDHP)
The HSA is the least expensive plan for employers because their premiums are lower than other plans. It has high deductibles meaning that you get coverage mostly for unforeseen emergencies. The deductible are usually high but if there is little medical care needed, the costs are usually lower. But companies must be aware of the fact that when healthcare is needed, they pay for their employee's deductible which acts as a deterrent to asking for medical assistance. That could undermine the benefits of this plan. To mitigate some of the burden on employees, some employers open an HDHP alongside a Health Savings Account
Health Savings Account (HSA)
HDHP members can open an HSA and make withdrawals tax-free if it is for medical expenses. It helps mitigate paying high deductibles and alleviate some of the expense. The money that is paid into the account often comes from both the employer and the employee. It is free of taxes and is based on your gross, pre-tax salary. This means it will reduce the total tax burden & make your paycheck bigger.
Flexible Savings Account (FSA)
An FSA allows an employee and employer to set money aside tax-free for healthcare purposes. One of its perks is that you receive tax relief on the money deposited into the account. The main disadvantage is that the total amount of funds your organization can withdraw from accounts is capped. However, if unused funds remain in your account, only $500 will count towards next year's cap.
Common Health Care Benefits
Dental
While the bulk of health care policies include dental care, most do not. You can purchase a separate dental plan or make sure to take advantage of your employer's dental coverage while you have it. Routine dental coverage is often too basic to support employees effectively. It can be lacking in both preventive care and ongoing treatment needs. Plans vary from including just preventive care (teeth cleanings, x-rays) to major care (surgeries).
Vision
Unrecognized eye problems can affect one's job performance in a negative way. Vision coverage encourages them to have their eyesight regularly tested and covers the expenses of eye-wear prescriptions. It's common for big employers to offer vision coverage in addition to standard health insurance. Not only does this improve the quality of life for employees, but it can also help their performance in the workplace.
Not sure about setting up your company in the US or how you can get the proper health benefits for your employees in the US? GOT can set your company up in the US without all the hassle of figuring out your employee's health benefits. Please contact Alejandro Santos at alejandro.santos@got.international from our Austin (TX) office for any questions or how GOT can set up your company in the US.
