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Health Insurance


Gary A

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Guys,

 

I would like to know the best way to offer health benefits. This is for a single employee, not a family plan. Do you guys think it's better to pay them in full as part of a total package and reap the benefit of a tax break or have the employee contribute a percentage? Just wondering what makes the most sense....

 

Thanks,

 

Gary

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Unless you are profitable enough to pay the entire amount, I agree with Frank, it's better for the employee to have skin the game. We see increases each year. To be honest, we, like so any other small businesses, cannot raise our rates and prices to keep up with the rising costs of doing business around us. We will eventually have to rethink health insurance too.

 

To everyone: Know your numbers, know your cost of doing business and make sure there is profit each week. I know it's tough, I have been doing this over 3 decades, but it's easy to busy, not so easy to make money.

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We use health insurance as a benefit for our current and future employees. I have noticed that older technicians value the health insurance much more so than younger technicians. We currently pay 100% of the health insurance costs. When competing with other repair shops, especially dealerships and chain shops, it helps differentiate us from other repair shops when trying to attract top talent. I have noticed that in our area, most dealerships pay a portion of the health insurance cost and the employee picks up the remaining balance.

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  • 10 months later...

When I had the shop and had 5 full time employees I paid all the health insurance for everyone under a group plan. Then on night two the the star players went out and got drunk and had a 1 car accident in a parking lot. Police came and arrested both of them. Courts assigned alcohol school and the insurance company sent a nasty gram a few months later that my 'group' was experiencing an unusually high percentage of expenses and raised the whole groups rate by about double what we had been paying. New rules went into effect, I would write a check once a month for the old insurance rate and the employees could shop and find whatever insurance they wanted, I was only giving the amount i used to pay. Oh yea, if they decided they did not want any insurance, they got no check. I got to see the policy and the bill and made sure they were actually using the money for insurance. I had to do the same thing, cancel the original policy and go shopping for myself a new policy. No more groups for us.

 

If I was to reopen I would make the employees pay something, I want them involved and aware of the real costs to have insurance. What percentage would depend on my bottom line and how much i wanted to keep those guys.

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  • Have you checked out Joe's Latest Blog?

         13 comments
      Most shop owners would agree that the independent auto repair industry has been too cheap for too long regarding its pricing and labor rates. However, can we keep raising our labor rates and prices until we achieve the profit we desire and need? Is it that simple?
      The first step in achieving your required gross and net profit is understanding your numbers and establishing the correct labor and part margins. The next step is to find your business's inefficiencies that impact high production levels.
      Here are a few things to consider. First, do you have the workflow processes in place that is conducive to high production? What about your shop layout? Do you have all the right tools and equipment? Do you have a continuous training program in place? Are technicians waiting to use a particular scanner or waiting to access information from the shop's workstation computer?
      And lastly, are all the estimates written correctly? Is the labor correct for each job? Are you allowing extra time for rust, older vehicles, labor jobs with no parts included, and the fact that many published labor times are wrong? Let's not forget that perhaps the most significant labor loss is not charging enough labor time for testing, electrical work, and other complicated repairs.  
      Once you have determined the correct labor rate and pricing, review your entire operation. Then, tighten up on all those labor leaks and inefficiencies. Improving production and paying close attention to the labor on each job will add much-needed dollars to your bottom line.
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