ANDOVER, MA- Law firms often face subtle "discrimination" in
health insurance and get overcharged for their premiums, but they can fight
back by using a health reimbursement arrangement (HRA) or a health savings
account (HSA), Jim Edholm, president of Business Benefits Insurance, writes
in the March issue of Legal Management.
How much can be saved? About 18 percent -- without reducing coverage -- is
a realistic estimate, says Edholm, of Andover, Mass.
Edholm's article points to four reasons for firms overpaying:
-- Location. Most law firms are located in high-cost metropolitan areas.
-- Demographics. White-collar professionals, particularly partners, tend
to work beyond the Medicare age.
-- Claims experience. On average white-collar groups, especially
attorneys, consume more healthcare than blue-collar groups.
-- Psychographics. "To deliver the quality of representation you want,
you must hire capable people," Edholm writes. "People of this caliber
expect and can get excellent benefits -- if not from your firm, then from
your competitors' firms. Because of this, legal firms tend to have very
rich benefits, particularly health insurance, which in turn leads to
another unintentional de facto discrimination."
Innovative Solutions Save
The best response to these problems is for law firms to take on a limited
amount of risk themselves, Edholm asserts. Instead of having the insurer
the pay first dollar of each claim, the firm self-funds payments for
smaller claims. It also sets up an HSA or HRA, which provide tax
advantages for the firm's partners and employees.
The article provides a detailed case history on how a law firm can save
with these innovative solutions.
The full text can be read at http://tinyurl.com/dbwtzb.
Legal Management is published by the Association of Legal Administrators.
Business Benefits Insurance (www.bbibenefits.com) is an employee benefits
planning firm. Edholm's benefits blog can be read at
http://bbibenefits.wordpress.com.
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