Creator1

After acquiring a small HVAC company, it was a goal of mine to at least provide healthcare before the end quarter one. This is a goal that we candidly missed by 2 days due to administrative delays, but I still count it as a win. We ended up offering health, vision, and dental insurance to all existing employees.

Why did we do this?

There are several reasons why we decided to offer insurance. The first being that both myself and my partner had been members of the military and had free, albeit not the best access to healthcare. We believe that people should have access to healthcare, and if we can provide an avenue for our employees to do that, then we needed to do so.

But there are other valuable, non-personal reasons why a business may want to provide insurance to its workers, especially in a blue collar setting. The most valuable asset and resource I have as a business owner is our skilled labor workforce. While sales drive the business forward, operations (the skilled workforce) supports all those crazy promises and deadlines that sales puts out there.

It became very clear to me that I couldn’t afford not to offer insurance to my workforce, I wanted to ensure that they were protected and taken care of in the event something horrible happened. Not only was it the right thing to do, but it was necessary to protect the business.

The feedback we heard from our current employees (and ones that had been there long before I had) stated they never had insurance offered. They also stated that many other competitors (in size and revenue) don’t offer insurance. This led us to view insurance as recruiting tool. In our short time having insurance we have been proven correct. In the case of three of our hires (one salary, two hourly) they stated that having insurance was a major factor in choosing us over another offer/opportunity they had. We now include our insurance information in our first interview with candidates.

Tax credits, this is another reason that encouraged us to provide insurance. As a small business, we employ less than 25 people and we qualified for some tax credits for health insurance/paying employee premiums. I would recommend discussing potential tax benefits with your insurance or tax professional, which is what we did prior to making this decision.

How’d it go?

Interestingly enough, the excitement and delight about being offered insurance didn’t really translate directly into enrollment. While just about every employee was happy about the prospect of insurance, and most asked questions, in the end only 4 employees out of 12 actually enrolled for health care. For vision and dental coverage we had a must higher enrollment percentage with 10 out of 12 employees enrolling in both vision and dental.

This struck us as strange, with all the excitement, and rush to get paperwork done, it seemed to us that there would be a much higher enrollment than 33%. We later found there were still several barriers to getting insurance.

The first was obvious, some employees felt that they couldn’t afford the premiums. We (the employer) are required to pay at least 50% of the employees’ premiums, which is what we did. We found that due to personal issues and financial issues of some of our employees felt they would not be able to or feel comfortable with paying their 50% of the premiums and/or deductibles associated with our plan.

We are working with our current insurance provider and financial institutions, as well as increasing pay/changing rules to establish an HSA (Health Savings Account) for employees (so they can save for these things), and we can ensure they can afford healthcare premiums.

There is a myth out there that if your employer even so much as offers insurance to you, you will lose access to Medicaid. I have found no proof of this, in fact I believe it’s common for people to use Medicaid as a secondary insurance. We brought our insurance representative in to answer questions and clarify that employees wouldn’t lose coverage even if they decided to use our insurance. Still this myth persisted and was a factor for at least 3 employees not obtaining health insurance (they did however get vision and dental).

Where this myth could have spawned from was perhaps the truth that sometimes Medicaid/Medicare (yes, some of our employees are on Medicare) is a better deal than the employer offered plan. We offered Blue Cross Blue Shield and offered to pay half of monthly premiums (again, required minimum), we offered to cover all premiums for vision and dental insurance.

Our plan didn’t make sense to some who felt their coverage under their current Medicaid plan was sufficient and paying even their half of the insurance premiums wasn’t worth it to them when their free (or close to free) insurance was fine for their needs. This is evident as well based on the drastic increase we see for vision and dental where all premiums are paid. We found this was the case for multiple employees.

The other reasons given for not having or wanting health insurance included already being covered by Tricare or the VA healthcare system.

What was the outcome?

The outcome was positive, and I will admit, I am biased as I have a sense of pride in being able to provide insurance to my team. I will be transparently vague about what we are paying as to provide some anonymity and accurate numbers.

We used our current insurance broker who found us a policy for healthcare, vision, and dental. So, the research aspect was minimal. They presented plans they felt fit our needs and why, then presented and pros and cons about the options. They would then answer any questions we had about insurance. I would strongly recommend the use of an insurance professional/broker for health insurance as there are so many nuanced details that they know that would take time away from your business to research yourself. We pay roughly $1,300 dollars a month, and this covers 50% of the health care premiums for 4 employees, and 100% premiums of vision and dental for 10 employees.

We are now able to offer this as a benefit to new hires, something that separates us from other competition in the area. Ultimately, we have found from an intangible perspective, this helped with retention, recruitment, and morale.

We get a tax credit to offset the costs associated with this, although I’m not a tax expert, this is simply what our CPA told me!

A metric that we hope to track with the introduction of insurance is to see if this has an effect in sick days, we expect to see an initial increase in sick days as a majority of these employees didn’t have access to healthcare and going multiple times now may be needed to address the potential build up of health problems. I do believe this will drastically taper off in the coming months and years.

Should you get your blue collar workers insurance?

I can say a resounding `YES!’

Our experience has been that what very little we spent in increased overhead has paid dividends already in the short time it’s been implemented. Like I’ve mentioned there are intangible benefits, as well as doing the right thing. Feedback from employees that elected not to get health care or vision/dental stated that, `just offering the insurance is important’ to them, it showed a clear commitment to investment in the workforce. As stated earlier as well, your skilled labor is your most valuable asset to the business. They are also usually in hazardous conditions, it is worth investing in ensuring they are covered and protected.

These are my personal opinions and experiences as I run my company, this is not tax, benefits, employment, or legal advice.