Health Care Costs for Big Business vs Giant Business
You know how your big business works to keep its employees covered with quality health care? It makes up a good part of a company’s budget. Even so, a comparison of health care costs for big business vs giant Business puts those numbers in perspective.
Big Business Health Care Costs
Understanding health care costs for big business vs giant business begins with understanding big business. The IRS calls your company a big business, using the phrase, “applicable large employer” (ALE).
An ALE has an average of 50 or more full-time employees (full-time equivalents, or FTE). A full-time employee, as defined by the Affordable Care Act, works at least 30 hours a week.
CNBC estimated average health care benefits per worker, at $14,156, last year. Employers picked up about 70% of that cost. So big businesses pay, minimally, around $495,460 annually. That’s almost a half million dollars.
Gigantic Companies Pay Hundreds of Millions, Billions, Trillions
Half millions and millions sound like substantial amounts of money: six or seven figures. Mega-corporations in the United States shell out hundreds of millions, billions, and even trillions.
The Automobile Manufacturing Industry: “Gold-plated Worker Plans”
Automobile manufacturers, in general, have very high insurance expenses. Unionized auto workers enjoy some of the most generous medical coverage plans in the country according to Bloomberg, which refers to them as “gold-plated worker plans.” Ford Motor Company expects its “health care costs to Top $1 Billion in 2020.”
For the Big Three … Ford, General Motors, and Fiat Chrysler … health insurance cost more than $2 billion in 2015. Costs have only risen since then.
Even Mega-Companies in the Health Insurance Business Pay Premiums
Former General Electric CEO Jeff Immelt, evaluating his company’s biggest expenses, noted that it had spent more than $3 billion annually on health care, reported Business Insider. According to Immelt, that was more than the company’s health care unit was bringing in.
For Big Numbers, Look to Walmart
Wal-Mart Stores Inc, the biggest U.S. private sector employer, has 2.1 million people on its payroll, with 1.4 million of them in the US. That amounts to “a staggering 1% of the U.S.’s 140 million working population.”
In 2014 the gigantic retailer announced that it would cut $500 million from its budget by eliminating coverage for 30,000 part-time employees, according to a 2014 Reuters report. Walmart, in the post, report its total annual health care costs. However, calculating the cost of health coverage for 1.3 million full-time US employees, using CNN’s estimated average coverage cost, rings the register somewhere around $19.3 trillion.
Wise Investors Are Paying Their Premiums Too
JP Morgan CEO, Jamie Dimon, according to Reuters, “has for years expressed concerns about rising healthcare costs.” With $1.25 billion spent on U.S. medical benefits during 2017, about 2% of the company’s expenses go to health care. If JP Morgan, as an investment company, can’t get its health benefits coverage below a few percentage points, you can bet that companies in most other industries are not doing much better.
Looking at health care costs for big business vs giant business demonstrates that companies come through for their employees. They ensure that they have adequate health care coverage for their valuable team. The efforts large companies make to raise capital, budget, and invest wisely with an insurance broker’s makes for a healthier country.