Employer tax credits and the Affordable Care Act’s health insurance marketplace for small businesses (SHOP) have made purchasing a health plan more cost-effective than ever for small employers. Still, choosing the right plan can present a challenge. Few small employers have the luxury of a dedicated benefits staff to wade through the many available plans, or the resources to offer employees a wide range of plan choices. But those limitations do not have to keep you from working with your company’s HR professional or an insurance broker to find the plan that best suits your organization’s budget and needs.
Just because a plan has a low premium, it may not be the best value for you or your employees. Make sure you understand all of the plan’s other costs, like co-payments, deductibles, co-insurance and coverage for out-of-network care. If your employees have to reach deep into their wallets each time they use their coverage, they will be less satisfied with their plan. And, it may create more work for your HR representative.
Many plans offered on the federal and state health insurance exchanges keep premiums affordable by contracting with a limited number of doctors and other health professionals – known as a “narrow” provider network. Before choosing a plan, make sure the network includes the providers your employees will need. Are there enough doctors in the clinical specialties your employees will use the most? Are there enough providers near where your employees work and live? If your employees often have to leave their network for care, their out-of-pocket costs can add up quickly.
Even with a robust provider network, your employees may sometimes choose to visit an out-of-network doctor. You will need to think about whether you want a plan that offers reimbursement for out-of-network care, and if so, how much it will cover and how the reimbursement will be calculated. Whether or not you offer coverage for out-of-network services, your employees may find it useful to compare costs in advance. If your insurer’s website does not provide this information, direct your employees to one of the free online cost comparison tools available to the public.
Since your organization may not have the resources to offer more than one health insurance option, you will need to choose the plan with the most value to your employees. While you cannot legally ask specific questions about your employees’ medical history, you can ask what coverage is most important to them and what trade-offs they would consider. Are low premiums a priority, or would they be willing to pay higher premiums in exchange for a lower deductible, or a larger selection of doctors?
Employees are happier with their coverage when they understand their plan and costs up front. So, it’s important that they know exactly what they are getting for their premium payment before they enroll. Make sure your insurer can provide clear, concise educational tools and resources. If employees are choosing from more than one option, offer side-by-side comparisons of each plan’s coverage and cost-sharing. Communicate clearly about enrollment due dates and paperwork, and designate a staff person, or a point person at your insurer, to answer employees’ questions throughout the process.
Studies show that the majority of Americans do not understand many basic health insurance terms, like “copayments” and “deductibles.” Ask your broker or insurer up front about when and how the plan communicates with members, and review their website and materials to make sure they are accurate, clear, concise and user-friendly. Will your employees have access to easy-to-read benefit summaries? How about regular emails, newsletters or other publications? Is there an online provider directory, and, if so, is it easy to navigate and regularly updated?
Nothing will frustrate your employees more quickly than receiving a costly bill for a service they assumed was covered. Work with your insurer to help employees understand the plan’s rules and use their benefits wisely, whether it is checking to make sure their providers are in the plan’s network, pre-authorizing certain medical services, or asking their doctors to prescribe generic or lower-tier medications on the plan’s drug formulary. Stress proactive planning with your employees, such as choosing a network pharmacy for their prescription medications or checking in advance to make sure all the providers involved in an elective surgery are in their network.
It’s hard for employees to understand their costs or the value of their plan without some kind of outside reference. Ask your insurer whether they provide cost estimator tools that help members understand their cost sharing, and what level of costs they might pay if they go outside their network. A number of state-run, nonprofit and health plan websites, as well as some individual providers and hospital networks, list prices for certain services and can give your employees a better idea of what providers in their area are charging.
Enrolling in a health plan is just the first step. Your employees will need ongoing education and support to help them use their benefits wisely and manage their out-of-pocket costs. Keep the lines of communication open by providing regular updates on the tools and resources that you and your health plan offer, or scheduling special informational sessions. Plan to post or publish frequent ‘provider guide’ updates when providers join or leave the network.
Over time, your plan, your company’s health insurance needs, or both may change. It is important to review your plan each year and make sure it is still right for your business. Are your premiums or cost-sharing increasing, and if so, is there a more affordable choice? Are your employees using the benefits you are paying for, or should you consider a different plan design? If your business has grown, is it time to offer your employees more plan options?
Choosing the right health plan requires small employers to think hard about what their organization and employees need, and what they can afford. By understanding all of the costs and trade-offs, keeping employees educated and involved along the way and insisting on clarity and transparency from your insurer, you can provide a valuable benefits plan that will not only help keep your employees healthy, but also help keep them with you longer.
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