1. What is your budget?
The first thing you need to consider is your budget. This will set bounds on what level of coverage you can provide your employees, what optional health benefits you can include, and what kind of cost sharing plan you have in place with employees.
This is also where you will want to review alternative funding methods for your employee health plan that are more budget friendly and which enable you to maintain a greater level of control over your plan pricing. For example, fully insured health plans with a major insurance company include margins for carrier profits that you would not have to pay for if you established a self-funded medical plan.
2. Who will be covered?
Do you just want to cover employees and their dependents? What about employees who retire? How long can they stay on your health plan after retirement, if at all? Are you only covering full time employees or would you like to extend coverage to some part time workers? Seasonal employees? What about also covering 1099 contract laborers? The question of who you are going to cover is not a simple as it sounds at first and you should carefully consider your options based on your primary workforce, the employee recruiting and retention goals that you have established, and the long term cost implications to your group’s health program.
3. How many plans will you offer?
As you know it's rarely the case that a business offers just one health plan to employees. This is more necessary than ever now that the age range of the workforce is widening — now it's not all that uncommon to work well past retirement age. What works for your younger, fitter employees may not be sufficient for your older employees. Some employers keep it simple with just a couple of plans to choose from and others like to go the extra mile and offer a buffet of highly customizable health plans to really satisfy employees desire for choice.
A lot of this decision is based on the budget you have to work with but also how each plan will perform for you, year over year. When considering plan design, it’s another good opportunity to reconsider how you are going to fund your health plan. Self-funded medical plans give you much more flexibility on plan design and a greater level of control regarding when the plan pays for coverage, who it pays, how much it pays, etc. Self-funded plans can also return surplus to the employer of your group has a good claims year.
With options like level-funding, stop loss insurance, and group captives even smaller employer groups are now able to take advantage of the flexibility found in self-funded medical plans.
4. Should you offer an HMO or a PPO or is there a better way?
When considering health insurance plans, it's important to pay careful mind to your provider network. With a Health Maintenance Organization (HMO), your are limited to certain in-network providers. This gives your employees less flexibility in where they choose to go, but HMO plans are generally cheaper and make it easier to predict future healthcare spending.
A Preferred Provider Option (PPO), on the other hand, is more flexible. It allows you to visit out-of-network providers and still get partial coverage, but you may have to pay more out of pocket. Depending on the specifics of your plan and how you handle cost sharing, this may mean higher and less predictable healthcare spending on your part as well.
But, there could even be a better way. Newer network models engage strategies like contracting for direct care with hospitals and facilities, utilizing medicare as a reference for the allowable charges payable on services rendered, and value based primary care arrangements which gives your employees a better experience and more quality time with their physicians. These are all network strategies which will directly lower your cost of claims and ultimately, the cost of your group’s health insurance.
Need Help? Don't Be Afraid To Use A Benefits Consultant
When it comes to choosing the right health insurance plan for your employees there are a number of things to consider. So many things that it can be overwhelming to do on your own. Many business owners worry that going to an outside consultant for their employee benefits needs means having to pay hefty consulting and services fees, but that’s not always true.
The right consultant will specialize in the healthcare cost containment strategies of today, which are very different from approaches used even five years ago. They will operate in an unbiased fashion vs just brokering plans and products for specific insurance carriers. And, if they’re doing it right, they will align their financial interests with yours by offering you a performance based fee model with savings guarantees. Only then, will you have an adviser who is fully capable of working “for” you and “with” you to find the best health plan model for your organization.
At Summerlin-Roberts we leverage our expertise in cost containment to provide the best possible health benefits at the lowest possible price, resulting in happier employees and leaner budgets. For more information about providing affordable health insurance that will satisfy your employees, please contact us today.