SURVEY SAYS – What's Your Health Care Worth?

August 13, 2009 (PLANSPONSOR.com) - One of the as-yet-unresolved issues regarding health care reform is the proposal (by some) to tax health care benefits, or at least health care benefits above a specific dollar amount.

Realizing (in a way that I’m not sure all legislators do) that those benefits cost more in some parts of the country than others, and acknowledging that different employers offer different levels of benefit coverage, and that different workforces may require/call for different types of coverage, this week I asked readers what their health care benefits package was worth.

“Individual” Differences

Well, as noted above, there are a lot of variables to be considered, but there were clear pluralities in this week’s responses.    Let me start by clarifying that what I was trying to get at was the taxable value (if/when those benefits are taxed).   That said, the most common answer(s) were:

Individual:

38% – more than $2,500 but less than $5,000

Beyond that, things were pretty scattered, with fewer than 5% in the other categories.

On the family side, the most common response - cited by 35.85% - was more than $10,000, but less than $15,000.   That was just ahead of the quarter ( 24.53% ) that said their family benefit was valued at more than $15,000, but less than $20,000.

Still, 13.21% said that value was more than $5,000, but less than $10,000 for their family benefit, while just under 8% said it was valued at more than $25,000.  

However, in the family category, just over 13% said they "had no earthly idea."

Verbatims

There were, of course, a goodly number of interesting verbatims.   Here's a sampling:

It really depends upon whether you count the premiums the company pays on behalf of me and my daughters (approximately $8,000/year) or the amount of benefit I receive from having the insurance coverage (last year this exceeded $20,000 with a major surgery for me and a broken leg for my college freshman). I would not work for a company that did not provide good health insurance coverage unless they paid me significantly more.

Fortunately, my employer pays 100% of employee portion plus 50% of dependent/spouse portion. But the total combined expense is ~ $1,200/mo... or ~ $14,000/year... of which I fortunately only pay about a 1/3 of the total bill.

We are self insured,, if you have cancer and the health care benefit for the year is $200,000 are you taxed on the benefit. If no claim for the year, do you have a taxable benefit???????

Employer gives us approx $90+/mo to spend on benefits (medical & dental - 2 options). Fortunately, don't spend much time using, but glad I have. Yes, I know I'm blessed!!!

We have an awful straight dollar amount given per month towards our premiums. So that way, when healthcare costs go up 12% or more every year, we as the employees absorb every cent of the increase and the employer's costs stay exactly the same! It's about the worst benefits package I have seen in my professional life. Can't be too choosy unfortunately when the job market is brutal!

We are in a small group plan so the rates are based on age and zip code of employee's residence. Being older, I have a higher premium.

I defer to my wife regarding coverage from my employer; she takes the kids to the pediatrician. She is extremely satisfied, which I can't put a dollar amount on (...on so many levels).

I guess it's really hard to say. We have a "catastrophic" plan from my wife's employer. They provide matching funds to our MSA of about $1500 a year. We pay everything out of pocket as long as we're in-network (outside of preventive care) up to $3000. Above $3000, they pay 80% to a certain amount, and then all of it above that amount. So if something really BAD happened, our plan would be worth a heck of a lot. But in basic day-to-day care, it's worth around $1500 - $2500.

Our organization pays 100% of the cost of health care coverage under a PPO plan for employee, spouse and children.

As a Local Government Employee I pay nothing for my full coverage healthcare that provide me access to some of the greatest Hospitals and Doctors in the world and my Doctor visits co-pay are only $10. I am more than happy to work for a salary much less than prevailing wage for my neck of the woods-my coverage is truly priceless!!!!!!!

For my employer, the difference between the coverage for a single person (6,240 in premiums and 2,100 in a health reimbursement account) and for any higher coverage (adding spouse, children or the whole family) is picked up by the individual. This means that I am paying an extra 8,560 from my pre-tax income just for premiums. I haven't heard any discussion about what implications there might be on this type of arrangement if all or part of the health insurance benefit is taxed.

That's our core plan. One of our HMO family tiers is hitting $20,000/year....ouch!

I'm not sure what number you are looking for here. My employer contributes approximately $3,800 a year. We have a cafeteria arrangement. My annual pre-tax costs are about $6,700 (includes the $3,800). I have been interpreting the tax on benefits to mean the pre-tax option goes away and I will pay tax on the $6,700 not just the $3,800 from my employer. I don't hear anyone talking about the fact it will not be just federal taxes. This will open the amounts up for state taxes as well.

How do you define "worth?" Premiums or benefits? If you're the plan sponsor, probably premiums -- but if you're the beneficiary, benefits paid. And few beneficiaries really know what their plan is worth in terms of premiums vs. benefits. As a benefits manager, I've long felt that when we report "total compensation" to employees, we should also be reporting on actual claim dollars paid on behalf of the employee and his/her family members covered by the plan.

I am so incredibly fortunate that my company pays my entire medical and dental premiums for my family. (I am salaried, but my company pays the entire medical and dental for all full time employees, but not their families). Although this will change this next year, I am still grateful to have health insurance. I struggle enough with co-pays and prescription co-pays.

But this is only our most popular, non-union plan and only includes medical/Rx. The cost varies significantly depending on the plan, which other "health" benefits are included (vision, dental, EAP, life, AD&D, disability, long term care, etc.). And "real cost" does vary based on geography (east coast, midwest, etc., as well as rural versus urban), population covered (manufacturing versus service, etc.), average age of participants, etc. etc. etc. That is why "health care reform" is merely a political initiative by government to garner votes and cannot, will not have any positive impact on the health and well-being of the citizens of this country. I challenge anyone to show me, long term, a country whose government has taken over its economy (and do not be misled, healthcare is a BIG part of any economy) whose citizens (as a whole) are wealthier than they were before the takeover. Perfect contra-example,. Which would you rather live in, North or South?

We also have two person coverage at a cost of almost $9k/year. We also have dental coverage which is over and above our health coverage. People who go to COBRA certainly are surprised at the cost but shouldn't be -- we supply annual benefit statements with the costs listed.

And yes, there were some perspectives on the whole issue of health care reform - on both sides of the issue:

"There's an old adage that says if you hang around a barbershop long enough eventually you'll get a haircut and if you hang around a bordello long enough, well, you get the picture. Substitute gov't health care for bordello...We should be very concerned whether the employer coalitions have enough left to withstand this onslaught 'cuz once this rock gets rollin' there ain't no stoppin' it."

"The majority of Americans have health insurance through an employer. I'm fortunate to be among them, but based on the anti-reform hysteria, doubt that many realize just how tenuous is their protection. Serious illness, injury or a change in employment often results in loss of coverage just when the need is greatest, followed by financial ruin. It's hard to imagine a more perverse system. Better to pay taxes to fund a system where all Americans are covered as part of a single risk pool, than premiums to support an insurance industry that strives to cherry-pick the profitable."

And these had a special resonance to my ears:

"Our benefit has consistently been decreased long before any perceived recession!"

"As the benefits admin for our company, I know all the costs, but I doubt our employees are fully aware. We send out benefit statements once a year but since we get no comments, I wonder how many are actually read."

But this week's Editor's Choice goes to the reader who noted "A more relevant question is ...what does it cost?"

Thanks to everyone who participated in our survey!

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