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The Practice Management Knowledge Community (PMKC) identifies and develops information on the business of architecture for use by the profession to maintain and improve the quality of the professional and business environment.  The PMKC initiates programs, provides content and serves as a resource to other knowledge communities, and acts as experts on AIA Institute programs and policies that pertain to a wide variety of business practices and trends.

    

  • 1.  Healthcare

    Posted 10-05-2016 03:33 PM

    Our small firm (26 people) is beginning to look at our healthcare renewal for 2017. This is a big issue for us since over the last two years our rates have gone up over 100% and all the prognosticators are saying this year rates will really spike. Has anyone found a solution to help mitigate expense such as joining a group of small businesses banding together to be able to get better rates? 

    I would appreciate any research, insight others might have.

    ------------------------------
    Nea Poole AIA
    Principal
    Poole & Poole Architecture, LLC
    Midlothian VA
    ------------------------------


  • 2.  RE: Healthcare

    Posted 10-06-2016 05:44 PM

    Nea is right-on in identifying the real impacts.  What was more flexible for working additional hours will become mandated not-to-exceed 40 hrs./week.  Anyone who is actually calculating and logging payroll will find that the employee is adversely impacted.  Their option to build up extra time for longer leave is gone.  This promotes an "off-the-books market"  A short week impacted by family or illness does not carry forward except during that 40 hour week.  We have both "professional" and "technical support staff" who were well above the former limits, had full direction of their work, and with rare exception an open schedule, who now don't meet that salary threshold.  It would have been wise to simply adjust the limit with a moderate increase and tie back to Cost of Living annual increases.  Taking a one-size fits all across all markets is not realistic and does not reflect differential fee basis of rural, mid-size city markets, and mega city markets.  It also fails to reflect regional economic differences.  This is trailing after the Euro economic model where there is a significant divorce between production and the government mandated pay-scale.

     

    These "Social Experiments" with wild swings in economic impact are silly.  I am hopeful this will be found unconstitutional which a rational person would consider it so.  For those who consider it rational, nothing is stopping them from providing infinite pay without regard to fee income vs. expenses.  I believe that economic model has been followed and found to have failed.

    Robert L. Mauldin, AIA

    2KM Architects, Inc.






  • 3.  RE: Healthcare

    Posted 10-06-2016 05:58 PM

    We ran into the same issues and I contacted our State AIA organization and the National organization to see what was available.  Unlike the Engineering Societies, AIA lags behind.  I used to work for an E/A firm and we had a health plan through the Engineering Society.  It was a group plan.

    When I inquired to AIA there was nothing.  Our State organization had tried to do a group policy years ago.  I did some research as to why it stalled and learned the following:

    1.  The problem was getting the interest from the firms and an insurance company who would host the group.  It is a lot of legwork.

    2.  Getting a large enough group.  If you lock into a "group" your annual renewals and premiums are then based on that "group".  So, if a group member architect or family member has a catastrophic event that requires a lot of expenditures (heart surgery, coma for months, brain surgery, cancer and extended treatment) in one year, the insurance company will recoup their expenses by raising rates exponentially the following year.  Especially if their metrics show that continuing care is required for this or these individuals.  If you have a 100 paying person group, costs are spread over 100 paying persons, if 1000 persons, then you see how it would be spread out.

    3.  Current "Individual" or "Family" policies say with Blue Cross for example are theoretically considered a "group" policy per my conversations with Blue Cross and independent agents when we went through this exercise.  When you apply for a Blue Cross Policy they compare you to your relative "age group" per their metrics.  Say you are 40 -45 years old and have 2 teenagers.  They say they calculate your policy costs on families of that make-up in your geographical area.  That is your "group".

    4.  When you hit 40 years old, have some nitro pills or a shock pack handy because your rates will automatically double.  Why, because they can.

    5.  Ours is outrageous.  We have Blue Cross plan that has a HSA component.  It was the best deal for us.  I get some tax benefit and the HSA money can be built up and used also for retirement.

    6.  Why is it outrageous?  Because of Obamacare, the free coverage, the folks who get free coverage don't go to a regular doctor, they visit the ER for any sniffle or ailment.  I better get off my soap-box.

    7.  There are other minor health plans who now have low cost options.   The catch is that they are non-qualifying plans.  And you have to ask this when you talk to them.  This means  that if you sign up for one of these plans, you report on your 1040 if your plan is qualified.  If not you have to pay a fine on your tax return.  These plans "help" you calculate if it will be worth it to you to pay the fine balanced with your lower premium.  The problem is that these policies are for 11 months of coverage and the cap on coverage is LOW.  They have horrible stipulations.  For example, Blue Cross is a $1 million policy typically, these "other" providers are $250k.

    If you want to call me, I can tell you more info about what all we have looked at including other providers, etc.  Hope this helps.  Coverages options are a disaster now.

    ------------------------------
    Brian McNew AIA
    McNew Architecture, APAC
    Shreveport LA



  • 4.  RE: Healthcare

    Posted 10-06-2016 07:42 PM

    We are still able to provide fully paid health insurance but with a high deductible ( $2000). It's a Humana PPO. Ours has a drug card that seems to be the most valuable benefit.

    It's still $300- $600/mo per employee. And spouses and kids can increase that to $1600/mo.

    We bought everyone fitbits and if they get to Silver level with Humana Vitality they can get a discount of 10%. If they do, we pay them the discount.  Young employees rarely appreciate health insurance but older ones do.  We make sure they know what it costs and what it increases as part of the total "salary" they receive.

    ------------------------------
    Betty Trent AIA
    Architecture Plus
    Austin TX



  • 5.  RE: Healthcare

    Posted 10-06-2016 07:49 PM

    We are just now beginning to offer insurance at my company and the cost is outrageous.  My husband has owned a Sales company for over 20 years and they switched over to Insperity about a year ago in order to save on insurance costs.  I'm looking into it right now.  He told me that there are about 4-5 organizations out there like Insperity.  I'm just starting to look them up, they are called PEO's.  I don't know if I like the idea of payroll coming from another company instead of directly from me, but he likens it to ADP doing payroll.

     

    Let me know if you find anything better, I'm in the same boat you are in.

     

    REBECCA CALBERT, NCARB, LEED AP

    Principal Architect

    CALBERT DESIGN GROUP, LLC

    2950 Cherokee Street, NW

    Suite 600

    Kennesaw, GA  30144

    OFFICE:  678-398-7744

    CELL:  404-434-9531

     






  • 6.  RE: Healthcare

    Posted 11-15-2016 11:42 AM

    Our 2017 rates are in and are truly astounding. If we were to offer the same level of insurance that we had for the 12 years before Obamacare our rates will have increased 459% from our last regular year, 2014, which would be a 91% increase from last year. If we offer the same subpar insurance we had last year which was an HSA and felt like we had no insurance at all, our rates increase "only" 55%. Our agent is suggesting an insurance with maximum out of pockets ($13k for a family) and very few benefits before that maximum is reached so that we have an only 2% increase this year.

    We pay 100% of our employees healthcare but it is becoming way too big of a number. The conundrum is that our younger employees don't really consider it a benefit BUT if we asked them to contribute anything they would feel that they are receiving less and therefore have a reduction in benefits.

    How do other firms cover healthcare? Do you pay 100% or ask employees to contribute? Is there a good way to express benefits as compensation to employees?

    Thanks.

    ------------------------------
    Nea Poole AIA
    Principal
    Poole & Poole Architecture, LLC
    Midlothian VA



  • 7.  RE: Healthcare

    Posted 11-16-2016 05:59 PM

    Nea,

    We all face continually increasing health costs for our firms.

    It is a significant percentage of income and expense to all.

    We looked at several private options and elected many years ago to join a Professional Employer Organization, Synergy, out of Chicago. Since we have a smaller firm than yours, they also provide HR services, 401k administration, and a host of other benefits a small firm needs. They are extremely competitive for health insurance based upon the size of the pool they have. Our employees get an option of plans, deductibles, and coverage based upon the amount they want to contribute on a monthly basis. We cover 60 - 70 % of health care premiums in our compensation packages.

    ------------------------------
    Clifford Mayer, AIA, LEED AP
    Principal
    Mayer Helminiak Architects LLC
    Mequon, WI



  • 8.  RE: Healthcare

    Posted 11-18-2016 10:23 AM

    Clifford...thanks that is a very helpful lead. I am hoping next year will not be the same as this one for healthcare but I will reach out to Synergy to see how they might help our firm with a host of issues.

    ------------------------------
    Nea Poole AIA
    Principal
    Poole & Poole Architecture, LLC
    Midlothian VA