Large Corporations – Success of Money-Saving Strategies and Premium On…

Large Corporations – Success of Money-Saving Strategies and Premium On…




It is well proven and understood by most large corporations that the cost of sponsoring health insurance is generally more than compensated by its benefits. Stronger motivation, higher employee retention, and the time and money saved by reliable insurance serve as commendable rewards for a company with the resources and savvy to sponsor health benefits for its employees. What many large corporations are not aware of, however, are the ways in which premium only plans serve to lessen the burden and increase the benefits of sponsored health plans. Compatible with most managed-care plans, POP plans allow large corporations to sponsor their health care plans at affordable prices.

As of 2011, employer sponsored health care covers the largest portion of insured Americans (approximately 156 million). The most important branch of businesses sponsoring insurance is the large corporation sector; with a 97.8% of large businesses offering some form of sponsored health insurance, the “big business” branch insures more than two thirds of all covered employees. Being such major consumers in the health care market as a whole, these corporations inevitably fall into insurance cost strategy trends. With the recent and emotional health care premium price increases, the current strategy trend corporations use include the utilization of the competitive market via Managed-Care Plans.

While Managed-Care Plans (among other strategies) have benefited many corporations in the short term, national surveys indicate that the current assistance strategies have failed to stem the gradual decline of sponsored benefits among large corporations. Over the last decade the percentage of individuals with employer sponsored health insurance has decreased from 69% to 61%. A noticeably slight shift until one considers that the eight percent decline equates to about 7.3 million individuals losing their insurance benefits. Large corporations interested in augmenting the rising cost of healthcare premiums and thereby avoid the loss of their sponsored health care should consider premium only plans as an affordable and easy to reach money saving strategy.

Premium Only Plans allow corporations to deduct their employee’s premium contributions pre-tax. The tax-free deduction not only greatly increases the take-home pay of the employee, it also equates to approximately 7.65% in annual FICA tax savings for employers. Premium Only Plans are especially advantageous to large corporations, as the tax benefits provided by the subscription of large employee bodies provides a little by little increasing tax return; in effect, large corporations employing a POP plan generally have all the costs associated with its initial set-up reimbursed within the first year of compliance. The accessibility of POP plans combined with the legislative promotions occurring nationwide insures that premium only plans are compatible with most pre-existing assistance plans and strategies.




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