Rising health insurance and prescriptions effect Nevada employers
July 17, 2017
For employers, benefit plans can help retain and attract talent with a company. The Reno based-Davidson Organic Tea strives to stand apart by offering free healthcare insurance for its employees.
“From what I understand, we are one of very few companies today in the market (that provides free healthcare insurance to their employees),” Kunall Patel, owner of Davidson Organic Teas, said.
Patel’s family has been growing tea since the 1920s and the Reno-based Davidson Organic Tea has been operating for more than 40 years. Patel explained that they have been providing free health insurance to their employees since their inception.
According to Patel, Davidson Organic Tea currently employs approximately 28 people.
“I want my employees to never worry about life, never worry about health knowing that there is a healthcare plan waiting for them if something does happen to them they will be taken care of,” he said.
According to the 2016 Employer Health Benefits Survey released by The Henry J. Kaiser Family Foundation last September, the annual premiums paid by an employer in the U.S. was $6,435 for single-person coverage and $18,142 for family coverage. The report also revealed that the average rate of family premiums had increased by 3 percent from 2015 and had increased by 20 percent from 2011.
Recommended Stories For You
As healthcare continues to change on a national level, employers must continue to keep up with the changes. Patel said that it takes a significant amount of time each year to cost analyze various plans to see what makes the most sense as an employer and for his employees.
“I don’t think I have ever been on one plan for more than one year,” he said.
Patel said that he has seen the price of health insurance increase over the years and as the company has grown. He recollected paying paid around $20,000 to $30,000 a year for eight employees whereas now he pays more than $100,000 for the 26 to 28 employees who are on the company’s healthcare plan.
“The key reason that I offer health insurance at no cost is for catastrophic issues,” Patel said.
He cited high-cost medical items such as rides to the emergency room, maternity care, surgery, cancer, major accidents, etc.
“Those things that come up in life cost today so much money that if someone had to pay those costs out of pocket it would run them bankrupt,” Patel said.
While he hopes to continue offering free health insurance to his employees, he questions if this business perk is sustainable in the long-term.
“I don’t see how long I can keep offering this perk because it is not sustainable from a business standpoint, from a financial standpoint and from a market standpoint,” he said.
The costs of prescriptions are also increasing. Patel said that even with free health insurance his employees are seeing the co-pay costs increasing on prescription medicines.
Sarah Gleich, the executive director of the Diabetes Association of Northern Nevada/California is also seeing an increase in prescription pricing — particularly for insulin.
In 1992 a vile of insulin was just a couple of dollars, Gleich said. Today, a vile costs around $400 dollars. She explained that a vile could last for one with diabetes a month but another person just a week.
The Nevada Diabetes Association is a non-profit that provides education and service to people living with diabetes. According to Gleich, they employ four people in Northern Nevada and service around 10,000 people a year in Nevada.
Gleich, who has diabetes herself, stressed the importance of having access to medications like insulin.
“It is either do or die,” she said.
She said that as insulin prices have increased, they are seeing a dramatic increase of people using their emergency insulin and diabetes supplies program, which helps keep people out of the hospital.
Having access to proper diabetic medications also allows employees to continue going about their jobs and lives.
“It keeps us working, it keeps us engaged, it keeps the economy running,” she said.