2017-08-10 / Business News

Health savings

How businesses can lower health care costs while increasing benefits

“THE WORLD IS CHANGING, AND ONE OF THE major problems we’re having — and it’s in the headlines constantly, every day — is health insurance,” said Ben Graham, president of Nico Miles Wealth Management.

It’s a many-faceted issue that includes the expense of policies, the ins and outs of the legislative process and a host of other minutiae that would dizzy the average American worker.

“We’re don’t really care about the details,” Mr. Graham added. “We just want it to be fixed.”

Mr. Graham recently sat down with Florida Weekly to explain one way he’s seen employers lower some of their health care costs while increasing benefits. It’s a process of coordinating different policies together, rather than shopping for the cheapest products.

And he knows whereof he speaks.

“We’re working on a plan now that’s going to save a company $90,000,” he said. “So the savings is really significant.”

GRAHAM GRAHAM Mr. Graham is in a unique position as an independent agent. Since he doesn’t work for a specific firm, he’s not obligated to restrict his offerings to that firm’s products.

His favorite analogy to describe his position uses food service. Whereas most people will go to a restaurant and order off the menu, what Mr. Graham does is more like being a personalized chef and nutritionist.

“What people don’t realize is that, no matter what insurance broker you’re talking to, they’re actually getting the same quotes from the underlying carriers,” he said. “Everybody’s getting the same quotes. So the only real difference is the service they’re getting from their broker. Does their broker have a service model that’s in line with the reality of their situation?

“As an independent, I’m looking at all the different aspects of what someone may need and how it will affect them, rather than saying, ‘Order off the menu,’” he explained. “Nico Miles doesn’t have any proprietary products. As an independent, I can choose anything that’s out there, as long as it’s right for the client.”

And it’s that flexibility which helps him to be able to help businesses that either already do or want to offer health care benefits to their employees.

Reducing the deductibles risk

One way people are able to save money on the cost of health insurance is to change the deductible. By raising the deductible, the policyholder can lower the cost of the premium. However, that means a bigger risk out of pocket. If something should happen, that deductible — depending on what it is — can have a massive impact on your finances.

“What we do is use a separate carrier — a separate type of insurance through voluntary insurance to cover that as a bridge so it actually brings the deductible effectively lower than they have now while they’re still saving on the premiums,” Mr. Graham said.

He elaborates: “Let’s say we have a $2,500 deductible but we want to lower the premium. We raise the deductible to $3,500, which is going to save premium dollars. But then we have $1,000 more that we’re risking if something happens.

“So what we do then is write a smaller policy that covers a portion of the deductible. So let’s say that it’s a $3,000 bridge for the deductible. So now your deductible has gone down from $2,500 to, effectively, $500. You’re still saving on the premiums — and what we’re seeing is policy holders saving more on the premiums than they are to buy the smaller policy.”

Essentially, you’re taking out one insurance policy on another policy.

“You’re able to save money, yet at the same time, you’re increasing benefits and decreasing the outflow of money,” Mr. Graham said. “The smarter, more savvy people who are willing to do their due diligence and have the conversation are the ones who are doing it.”

At the same time, his company is able to add voluntary benefits, such as accident policies, cancer policies, term life insurance and more, so it all blends together.

“And the companies are actually saving money while adding benefits,” he added.

The concept presents a way for employers that are already spending dollars on health insurance to save money.

A business needs only three employees to be eligible, but it can have 45,000 and still make it work.

“It’s not going to cost the employer anything unless they want to pay,” Mr. Graham said. “It also saves the employer on FICA taxes because most of these premiums are taken out pre-tax. If they already have voluntary benefits, there are ways to save on those benefits and those premiums at the same time. It’s especially great for companies that are in a situation that have to provide some type of health insurance.”

But it’s also a boon to small companies that find it difficult to offer any benefits at all.

The small-business benefit

“Let’s say they have three employees. They just can’t afford to give health insurance — that can be hundreds of dollars a month per employee. They can say, ‘Let me do just $40 per month,’ and then pay part of the voluntary benefits, which is then part of their benefit package which they never would have had otherwise. Again, they don’t have to do that — it’s totally up to them. But they could say, ‘We do have some benefits we can offer’ — and something’s better than nothing.”

While Mr. Graham asserts that companies need to know these types of options are available, he also warns that you can’t just pick these products “off the shelf.” You have to have one strategy working with another, and they have to be coordinated.

“That’s what I do is help coordinate those things and make sure they pull together using the right expertise.

“Most people try to pigeonhole. When they hear ‘wealth management,’ they hear ‘stock market.’ Of course, we do investments. In some ways, that’s the easier part. But what I do goes well beyond that because it’s really about risk management across everything, not just your investments.

“Everybody should be really looking at these items. But most advisers are focused just on the stock market, which is fine, whereas I focus on the overall big picture and real wealth management, not just necessarily investing.”

Mr. Graham has a quote on his website: “Life is easier when expenses are lower.”

And health insurance is one area in which he’s doing that for businesses as well as for individuals. ¦

Ben Graham

>> Nico Miles Wealth Management
7273 N. Blue Sage
Punta Gorda

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