LIMITED MEDICAL POLICIES

Employers in many industries which hire low wage and/or part time employees are seeking ways to attract and keep the best of these workers, yet not incur additional wage and benefit costs which would cause non-competitive pricing. These employers cannot afford to extend full medical plans to those employees, yet are looking for something to protect their health care interests and act as a tool for attraction and retention.

There are different ways to approach this but one is what is called Limited Medical. These policies pay for doctors’ office visits and sometimes other expenses such as prescription drugs and diagnostic tests, and limit the amount of each that will be covered.

Why Provide Limited Medical Benefits?

• 70% of all working people and their dependents incur less than $1,000 of care in a year.
• Low earnings, uninsured people put off going to a doctor and when they finally do, the problem is in a more advanced, costly stage, which the "Social Safety Net" pays for monetarily and the person pays for in greater suffering.
• Make a limited benefits policy (one which pays up to $1,000 of office visits and some prescription drugs--with the remainder of drugs at discounted prices) available to the low wage employees.
• The employees' annual expenses are covered 70% of the time.
• More important, the presence of coverage gets them to a doctor sooner and gets serious illnesses diagnosed much sooner. If hospitalization is required, the Social Safety Net still pays, but it pays less, and the person suffers less.
  

Advantages to the employer:

• An attraction and retention tool, even if the employer pays nothing for the coverage, which may cost $30 per month, give or take, for an individual.
• If offered to the employees at their cost but through pre-tax payroll deduction, the employer saves 7.65% FICA taxes, and if the employee never hits unemployment compensation wage bases, another 3% or 4%. So your savings may be $5 per month per enrolled employee. Maybe more.
• If offered to the employees at their cost but through pre-tax payroll deduction, the employee saves 7.65% FICA taxes, and Federal and State marginal income taxes, possibly bringing the total to 20%, perhaps more.