Ok, I am considering doing a plan where employees can either take advantage of our medical plan or be paid out in cash instead. So if you had serious health issues you would benefit a lot from the plan but if you'd rather shop on the marketplace you could keep a little cash. What's your opinion?

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A fully paid medical plan would go over much better

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This 👆🏻both companies my husband last worked for and currently works for fully paid his monthly insurance with really good coverage. It has been a huge saver to our monthly budget.

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The marketplace would rarely be cheaper but it definitely helps employees who are covered on a spouses plan! I would consider paying it out monthly in case you have an employee who needs to jump on your plan if their spouse loses coverage.

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It would be nice to pay for someone who isn’t using it. I’m always on my husbands plan because they pay 100% for him and me and it’s excellent insurance. Barely pay anything at all if I do it’s an occasional co pay 15$ for limited things and 10$ for meds. That being said the best way to retain employees and make them happy is to offer this kind of a medical plan in the first place. Whenever my husband gets antsy we always land on him staying for the medical plan.

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I think it would help to know more about your company culture and what motivates your employees. If they crave freedom of choice, they may like the payout option to seek their own insurance options.

However, if someone craves simplicity, or the tax incentives of deductions coming out pre-tax, they may not like having to go to the marketplace.

Also, will your team increase the payout each year? If so, do you tie the increase to inflation or local COLA?

Agree to this,depends on your employee age group and culture

Sounds like a recipe for adverse selection

What about a different option? For people without serious pre-existing conditions, there is now a nonprofit health plan that will save 30-70% on healthcare. No network - see any doctor - and the deductible is per household rather than per person. The drug plan is the least expensive it can be because it is administered by a nonprofit. Also, I think your company will save money on premiums paid for employees who choose this plan - a win for everyone. Let me know if you would like more info.

I believe the individual marketplace plans are all local - not nationwide, as business group plans are.

Marketplace is not going to be cheaper for comparable coverage. If you go cheap you are going to get what you pay for. Marketplace has it's place...it's helpful for those with no other option..but marketplace insurance is crappy....it costs an arm and a leg for decent insurance there.

Some employers offer incentives to take the high risk plans...it costs them less and saves you money. Sometimes they offer a visa card or funded FSA account to cover some expenses for you taking that plan. If that was offered that wouldnt be a terrible plan for someone generally healthy

Just a heads up - if you are a big enough company that you have to worry about the ACA, there are some really specific requirements you have to satisfy with respect to cash payments in lieu of healthcare

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