Jay Starkman, CEO of Engage PEO in St. Petersburg, FL, remembers a fifty-person, light-manufacturing company in the southeast United States.
Ten years ago, health insurance rates were very low, and employee participation was very high. The employer paid 100 percent of health insurance, dental and vision coverage. “At the time, that was expected,” Starkman says. “That was what the company needed to do to be competitive.” All the firm’s employees participated.
As the years went along, employees aged and medical costs went up. The company began to water down its benefits plans, but costs still went up by at least 10 to 15 percent every year. In one dramatic year, the increase was between 40 and 50 percent.
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