Understand how to consider funding options, network strength and voluntary benefits as you approach the process of choosing group health insurance.
There's a lot to consider when buying group health insurance. Affordability is important. So is employee satisfaction. In fact, workers name health insurance as the most important benefit a company can offer, according to data from the Employee Benefit Research Institute. Here's some guidance to help as you approach the process of choosing health insurance coverage for your employees.
Monthly premiums are typically paid for by both employer and employees, and how that’s divvied up is an employer-controlled component (though some insurers and health plans require businesses to cover at least 50% of premium cost for covered employees). Explore your funding options, and understand how to factor cash flow and risk tolerance into the equation. For example, a defined contribution model allows companies to contribute a fixed amount of money toward employees' health insurance each month, making healthcare costs more predictable for organizations seeking a low-risk approach.
Consider using a survey or questionnaire to gather targeted information that will be helpful in the quoting process. That might include doctors, facilities or hospitals that employees would like to be in network, as well as prescription drugs they hope will be covered. Also, understand what employees value most in a policy. For instance, are they willing to accept higher premiums for lower out-of-pocket costs for medical visits?
While there’s no magic number, The Insurance Information Institute recommends checking with two or more companies to get a full picture. Analyzing offerings from a few companies gives you a better feel for the options available to you and how costs vary between firms. Look beyond the premium when comparing plans; it's only one item among many variables, including networks, copays, coinsurance, deductibles and additional benefits such as a nurse hotline and wellness program. Weigh the total package.
Ratings agencies such as A.M. Best, Fitch, Moody's and Standard & Poor's offer carrier ratings for all insurance companies, which represent each insurer's financial health. The more financially stable a company is, the less likely it may be to fail or be unable to pay for claims. Also, get a feel for average premiums industry-wide and the employer/employee cost split from organizations such as the Kaiser Family Foundation. For instance, annual premiums for employer-sponsored family coverage averaged $17,545 in 2015, and employees paid $4,955 of that.
Dental, vision and accident are among the top voluntary benefits. In fact, dental benefits that focus on prevention are the most requested voluntary benefit, even when employers do not contribute. Does the medical plan include a wellness program? Embedded wellness programs can not only improve workforce health, but can also help you save on renewal premiums if program participation rates are high.
The best group plan will be the one that meets the needs of your employees in the most comprehensive way.
1"Employees Continue to View Health Benefits as Important"; Benefits Pro; 2015. http://www.benefitspro.com/2015/04/27/employees-continue-to-view-health-benefits-as-impo?slreturn=1465439843
2“HealthCoverageGuide.org, Contribution Requirements”; Small Business Majority; 2015.http://healthcoverageguide.org/reference-guide/laws-and-rights/contribution-requirements/
3How to Assess the Financial Strength of an Insurance Company"; The Insurance Information Institute. http://www.iii.org/article/how-to-assess-the-financial-strength-of-an-insurance-company
4 2015 Employer Health Benefits Survey; Kaiser Family Foundation; 2015. http://kff.org/health-costs/report/2015-employer-health-benefits-survey/
5“5 most popular voluntary benefits”; Benefits Pro; 2015. http://www.benefitspro.com/2013/08/14/5-most-popular-voluntary-benefits?page=2&slreturn=1466089621
6 “Voluntary Benefits and Services Survey: A Fresh Look at Enriching Core Benefit Plans;” Towers Watson; August 2013. http://www.towerswatson.com/en-US/Insights/IC-Types/Survey-Research-Results/2013/07/Voluntary-benefits-and-services-survey
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