Four Questions to Ask Before Purchasing Employee Health Insurance
If you’re looking to change your current health insurance benefits for employees – or you’re considering offering health insurance benefits for the first time – there are some key questions you need to ask as you investigate options for your business.
What Plan (or Combination of Plans) Is Right for My Business?
There are many types of health insurance plans available: Preferred Provider Organization (PPO) plans, Health Maintenance Organization (EPO) plans, Exclusive Provider Organization (EPO) plans, and Health Savings Account (HSA) compatible plans. You might even consider a multi-carrier private exchange that offers all of these. With any type of fully insured plan, you pay a premium and the insurance company assumes the risks and pays claims related to your employees’ covered health care services. Many businesses prefer a fully insured plan because it helps them avoid unexpected costs in the event of dramatic health claims. Talk with your broker about what you and your employees are looking for and he or she will work with you to determine what plan or plans might work best for your business.
Is a Single Carrier Best or Are Multiple Carriers Better?
More and more, small and midsized employers are choosing to get coverage from a health insurance exchange, which offers you and your employees access to multiple carriers through a single program. With a multi-carrier exchange, you and your employees have the ability to choose from more plan types and more carriers, so each of you can find coverage to match your individual or family health care needs. For example, the CaliforniaChoice private exchange, which has been available to small businesses in California since 1996, offers dozens of EPO, HMO, PPO, and HSA-compatible plans from seven health insurers: Anthem Blue Cross, Health Net, Kaiser Permanente, Sharp Health Plan, Sutter Health Plus, UnitedHealthcare, and Western Health Advantage. This program gives employees the ability to choose the health insurance plan that best fits their specific needs and budget.
How Can I Control My Health Care Costs?
One of the often-cited reasons employers like private exchanges is Defined Contribution, which gives you the ability to set the amount you want to spend on health benefits for your employees each year. You can choose either a fixed dollar amount or fixed percentage of the costs of coverage – for example, 50% of the lowest-cost plan. Whatever amount you choose, it’s locked in for a year. That gives you complete control over what you spend on your employee benefits. If an employee selects a health plan that costs more than your generous contribution, he or she simply pays the difference. At renewal, you have the option to adjust your contribution – up or down – which gives you continued control over your budget for the next year.
What About Administration – Will It Be a Lot of Work for Me or My Staff?
When comparing benefits and insurers, two other things to consider are ease of administration and the availability of added, no-cost benefits. Maybe you’re worried about how much time you’ll spend on administration. If you offer multiple plans, or plans from different carriers, does that mean multiple bills you’ll have to pay each month? Or, perhaps, you want to offer Dental, Vision, or other benefits like Life Insurance for your employees, but you’re concerned about the costs. Another advantage offered by a private exchange is streamlined administration. If your business has 10 employees, it’s possible to offer them a range of health plans and still get just one bill for all of their coverage. You can also offer other benefits – often at little or no added cost. CaliforniaChoice, for example, offers discounted dental, vision, and hearing services through its no-cost Business Solutions Suite as well as a range of affordable employer-sponsored and voluntary benefits. And administration is easy – with one phone number and one website for assistance.
One Final Consideration: Choosing the right health insurance and benefits partner is important. If you don’t already have an employee benefits broker, we can help you find a CaliforniaChoice broker to speak with about health insurance for your business and your employees.