5 Tips for Selecting the Best Health Insurance Plan
The annual health insurance open enrollment period is going on now (through January 31). If you’re an employer, you may be thinking about the steps necessary to make sure you've provided your workers with the proper health benefit choices.
What plans should a good employer offer? And how can one make those plans' benefits more appealing? Focus on the following tips to make sure you and your employees are getting the most out of your company's healthcare benefits.
1. Know your options
There are three categories through which you can get health insurance plans to your employees.
Defined benefit plan -- This is what we traditionally think of as employer-provided healthcare. The employer offers coverage through a group plan, and the employee has to work within the services and network that are provided.
Defined contribution plan -- With this category, instead of providing an insurance plan, the employer provides an allowance and employees choose the plan that’s right for them from a menu of options (e.g., life insurance or disability insurance). Companies like Liazon provide private benefits marketplaces for employees to spend their allowance.
Professional employer organization (PEO) -- If you want to provide the perks of workplace insurance but don’t have the scale benefit-rich plans require, you can join a PEO like Trinet or Justworks. The PEO will essentially co-opt your employees, and benefits will be provided by the PEO but at large group rates.
2. Consider wellness programs.
Obviously, medical emergencies come up, but preventative measures are a great way to curb healthcare costs. Wellness programs with participation perks or tools like fitness trackers (half of which are purchased by employers) help encourage healthy habits.
Some employers offer discounts on health insurance costs, but be careful if you go that route: CVS was sued for not offering the same premiums to employees who didn’t participate in the company's wellness program.
3. HMO, PPO, EPO? Know the differences.
It’s important to understand the types of plans that you can make available to employees.
HMO -- A "health maintenance organization" will significantly lower costs but limit your employees’ healthcare network. They’ll need a referral from their primary care physician to see a specialist.
PPO -- "Preferred provider organizations" offer more flexibility. Employees don’t need any referrals and may see any doctor they’d like inside or outside of the network; staying in the network however, will save them money on copays. PPO premiums are higher than HMO premiums.
EPO -- An "exclusive provider organization" is a hybrid plan. Employees still have a network of providers, as they would with an HMO, but they don’t need a referral to see a specialist.
The balancing act of lower costs versus less restrictive plans is why you should consider whom you’re offering the plans to (i.e., will those recipients be frequent healthcare consumers who might balk at restrictions?)
4. Be mindful of who your employees are.
One thing you don’t want to do is offer a rich health insurance plan to your employees, realize you can’t afford that plan and then have to increase the employee contribution or else downgrade benefits. It’s important to take a look at the costs to your business, and whether you can sustain those levels, before deciding what plans you’re going to offer.
Is your workforce largely made up of young, healthy “invincibles”? Offer plans with higher deductibles and lower monthly premiums since members of this group are less likely to use their insurance. Flexible spending accounts (FSAs) or health spending accounts (HSAs) can also help lower costs and still provide protection.
If you have people on your payroll that are eligible for Medicaid or subsidies, make sure they’re taking advantage of them. Companies like Benestream can help migrate eligible employees to Medicaid plans, and the savings can add up quickly.
5. Learn what your competitors are offering.
There are many ways to compete with companies in your space through salary and workplace culture, but having attractive benefits is another way to attract the level of talent you’re looking for.
Be sure to take a look at what benefits your competitors offer (use the careers section of their websites). You’ll know what your applicants are seeing and can then try to match or surpass your rivals.. Even if you can’t meet their bar, you’ll know what applicants are expecting and can counter with arguments as to what makes your company the better choice.