When putting together a health plan for your company, there are a number of variables to consider: choosing the right carrier, maintaining coverage suitable for you and your employees, and keeping costs down, just to name a few.
But, let’s be honest. You’re busy running the company, so you probably don’t have time to adequately and effectively research health insurance carriers. That’s why working with a broker who represents a reputable company can help to ensure that your company’s individual needs are taken into account.
“Consultants and brokers help the benefits coordinators during the quoting and the sales enrollment process,” says Greg Amato, director of broker relations at SummaCare, Inc. “Their ultimate goal is to find the best-suited health insurance carrier with the most options that meet both the employer’s and the employees’ needs.”
Smart Business spoke to Amato about the role a qualified broker plays in choosing the right health plan for your company.
How do you go about choosing a broker or consultant?
Most consultants and brokers work on behalf of the employer and they represent multiple insurance carriers. They need to be knowledgeable about all of the health insurance companies they’re recommending. The best scenario is to select a consultant or broker that places the employer’s and employees’ needs first.
Most consultants are fee-based, meaning they are paid directly by the employer, while brokers tend to be paid a commission, such as a percentage of the premium. Sometimes brokers are paid a flat-dollar amount or on a per-employee, per-month basis.
Word-of-mouth and referral-based references are the best ways to find good brokers or consultants. Most benefit coordinators have friends at other companies and they will readily share information. There are also industry organizations that can assist employers with locating and evaluating brokers and consultants. These organizations can be found easily on the Internet.
What should you consider when selecting a health plan?
The most important points to consider when evaluating a carrier are the financial strength of the carrier and industry accreditation. When you have claims, will it and, more importantly, can it pay claims? And, find out how the National Committee for Quality Assurance (NCQA) rates the carrier.
Another important aspect is the carrier’s reputation in the market. Does a company lower its prices at the beginning to attract business and then raise them dramatically when the first renewal comes up? Sometimes those increases can be 20 or 30 percent. It’s a good idea to look at a carrier that is consistent when calculating health trends and pricing year in and year out.
Some other things to consider are cost control mechanisms. For example, does the carrier offer wellness programs? These programs help keep your employees healthy and prevent them from getting more serious diseases that ultimately drive up the costs of insurance premiums. Wellness programs can target those at risk for certain diseases and assist them in changing behaviors.
What are some things to consider when choosing plan designs or options?
Most health insurance carriers offer a wide array of medical and prescription drug plans. Preferred provider organizations (PPO) offer the most flexibility because they offer both in- and out-of-network benefits versus more restrictive HMO plans. PPO plan designs usually have many levels of deductibles, co-pays and co-insurance percentages. Some companies choose to limit their out-of-pocket exposure for their employees while others want to drastically lower their costs by choosing plan designs with high out-of-pocket maximums.
Many employers today offer dual choice options to their employees. This type of offering uses a core plan with an option to upgrade to a richer plan design by paying the difference. So, the contribution level that the employer makes would be based on that core plan, and the employee would pay the difference to get the richer benefits plan.
Some employers are making consumer-driven health plans available as a cost reduction strategy. Consumer-driven plans have high deductibles, usually greater than $1,000 for a single person or $2,000 for a family. Many of these plans are used in conjunction with a health reimbursement account (HRA) and are nonportable, meaning if employees leave the company, they can’t take it with them. The employer funds that account, usually based on an incurred claim. Whatever is out-of-pocket, the employee has to produce some sort of documentation to prove that he or she did incur that expense.
Another form of a high-deductible plan is a health savings account (HSA). These plan designs typically have a $1,200 minimum deductible for a single person and $2,400 for a family. Either the employer or the employee can fund the HSA and it is portable. Employees can withdraw from that account for any medical expenses that are established according to IRS guidelines. The value of the HSA is that it can accumulate money over time and can be used for future out-of-pocket medical expenses.
With so many options available, brokers and consultants are a valuable resource to help you determine the plan(s) that best suit your company.
Greg Amato is the director of broker relations for SummaCare, Inc. Reach him at (330) 996-8950 or [email protected]. SummaCare, Inc., a provider-owned health plan located in Akron, Ohio, services members in an 18 county service area through a network of over 7,000 providers and many top hospitals.
