Is it time to encourage employees to shop for own health insurance? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Is it time to encourage employees to shop for own health insurance?

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If employee health care costs are hitting your organization hard, consider a tactic increasingly used by employers: Encourage workers to shop for alternative insurance plans on the private market.

According to a Kaiser Family Foundation survey, 37% of employees who work in small companies (199 or fewer workers) pay 50% or more toward their family coverage premium. Some of those employees actually may cut their costs by taking out a private health insurance policy, especially if they are young and healthy.

Consider this scenario: An employer covers employees at no or low cost, and makes the employee pick up the tab for a spouse or family coverage. Having a separate private policy may cost less than the employer’s group plan because the rates are calculated on the individual’s age and health status. A young male spouse may pay considerably less separately.

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