Jonathan: I had the pleasure of sitting down with Alex Miller of Millennium Medical Solutions with the goal of figuring out the key questions restaurant owners should be asking with regard to health insurance which then lead to a larger HR picture. Below is an edited version of our conversation.
Jonathan: Alex, everyone knows healthcare laws have been going through lots of changes. What should restaurants owners ask their healthcare broker?
Alex: The first questions is “what is their method for controlling healthcare costs”? Using data and benchmarking they should be able to show you where your premium falls in comparison to restaurants similar to yours. They will also negotiate with carriers to get you the best rate and suggest alternative options for funding your benefits.
Jonathan: I often say rate or cost does not mean much unless you consider value. So what should they expect for the best rate?
Alex: “Best” refers to the best brokers and the best carriers. The best brokers will be able to provide you with references in similar industries and demographics to yours. This guarantees your benefits broker is focused on the specific types of products your employees need. The best brokers are the ones who are invested in your employees and want them to completely understand their benefit options. They will host informational sessions and schedule employee meetings so everyone can understand what they are getting. Lastly, you want your broker to be accessible in case you ever need them. Someone needs to always be available to help you if you have a question about your plan or are having trouble making a claim. This dedicated contact person can help you resolve any issues and answer questions.
Jonathan: And what about best carriers?
Alex: The best (carriers’) insurance programs can directly impact employee turnover, retention numbers, workplace productivity, job offer acceptance rates, and candidate quality. With the ability to affect your organization at a very large scale, it is important to have a broker and carrier who really outperforms. A good broker knows the pros and cons of the carriers and can steer you in the right direction. You might not be able to tell the right decision immediately, but the wrong choice can really impact you and you don’t want to experience those shock waves.
Jonathan: Health insurance is often thought of as a retention tool because employees or potential employees want to know that they have good coverage. When framed this way it sounds more like HR than just health insurance.
Alex: It is part of the HR sphere. A good broker takes compliance to the next level. They will supply you with all of the tools and information you need in order to make informed decisions. They will act as a trusted partner who works strategically with HR, supplying the vital tools for success; tools such as online enrollment and outsourcing services. You want your broker to be a total solution provider for your organization.
Jonathan: Talk to me about PEOs (Professional Employer Organization)?
Alex: A PEO may very well be the answer to the common question, “How do we get into a large buying group for healthcare? We have young employees and likely rated as a low risk (profile)”. A restaurant may be part of a buyer group for everything else but for healthcare they cannot combine with other businesses. With a PEO a small business can underwrite and indeed get large group rates and yield a 15-40% medical insurance savings alone. For example, for New York businesses, the rates are the same whether the group is 28 or 58. Additionally, for Restaurant Execs there are unique benefits no longer offered on New York SMB Market. The biggest compliment we hear is that you have empowered our restaurant with simplicity, choice and a sustainable solution needed to attract and retain our greatest asset - our people.
Jonathan: OK I understand that PEO or large buying group using payroll and benefits has taken off. Is this appropriate for restaurants?
Alex: So the PEO can get pricey depending on the number of participants enrolled on a health plan. I would not say this is an automatic for all restaurants. That said, if the PEO can save enough on the medical to offset admin costs and the company can save valuable time then it could work. The average man hours saved is 10 hours per month. There is empirical evidence that companies using a PEO grow faster and stay in business longer. I would simply say why keep doing the same thing and expecting a different result. At renewal, you should be kicking the tires with an experienced PEO expert. Borrowing on 20 years of industry experience and coming from Blue Cross (from years ago) we are in a unique position to help our clients.
Jonathan: If the PEO does not make sense do you then advise they simply go back to their state market?
Alex: Clients today are sophisticated and demand simplicity and value. As an alternative to the PEO we offer a technologies exclusive via Private Exchange. This tech emulates the defined contribution cafeteria style multiple plan offering with, a Benefits/Payroll/Tech convergence if you will. The admin costs are a fraction of a PEO but there are no large group medical discounts. This is a great affordable fall back option to gain competitive advantage for our restaurant groups.
Jonathan: Alex, thank you for your time
Alex: Thank you, and everyone should feel free to reach out to me. I’m happy to help restaurant owners or other business owners get the best answers so that they can make the most informed decisions.
Jonathan: Alex can best be reached at Millennium Medical Solutions,
200 Business Park Drive, Suite 204, Armonk, NY 10504, (914) 207-6161,
website: Millenium Medical Solutions