How to ask the right questions when choosing a health plan

Randy Narowitz, CEO, Total Health Care

U.S. employers are continuing to struggle with rising health care costs. To limit spending, many are shifting costs to employees while others are emphasizing wellness initiatives or controlling costs through health savings accounts and reimbursement arrangements.

“The biggest area of concern we are hearing from employers today is they can’t manage or predict the cost of health care benefits,” says Randy Narowitz, CEO of Total Health Care. “Having predictable, manageable cost increases is a real value to employers.”

Smart Business spoke with Narowitz about what to ask when choosing a plan.

What factors should companies consider when analyzing their employee benefits?

Typically, you start with the plan design that you offer today then decide if the company can maintain, improve or cut back on the benefits.

It’s important to evaluate alternatives in terms of cost and products offered. There are a variety of ways to differentiate carriers: size and strength of the provider network, plan design flexibility and premiums.

What questions should an employer ask a carrier when choosing a plan?

If you are using the benefits as a tool to attract or retain employees, then you want to evaluate the quality of the benefits and compare them to what else is out there in the marketplace. Features such as co-pays and deductibles are factors in the decision-making process and can be tweaked to be competitive. Also, access to care and a strong provider network are important components to consider.

If you are cost sensitive, then you want to ask about how to optimize the benefits at the lowest possible premiums and analyze the trade-off between the premium costs and the benefits.

What can a company expect from its relationship with its carrier?

Most employers use the services of a consultant or broker to assist them in the decision-making process, and their roles vary.

At one extreme, the consultant is your exclusive liaison to the carrier and can represent several health care plan options, helping the employer understand which products are best for its business. The consultant may also take the lead on administrative tasks including open enrollment, employee education, compliance and communications with the carrier.

At the other extreme, a consultant’s role is limited to the selection process. You can expect your representative to be able to differentiate the plans and the products depending on how you prioritize your decision-making criteria.

As an employer, you should expect your representative to be able to navigate through the decision-making process on your behalf.

Your plan representative, carrier and consultant also need to be able to educate you about the latest changes associated with health care reform.

How can companies save money when they are looking for a carrier?

Shifting the financial burden to employees by raising co-pays and deductibles, and having them pay a portion of the premium are ways to reduce and control your health care costs.

Savings associated with prescription drug costs can be achieved by raising co-pays or by restricting access to branded drugs when generics are available. Employees are very sensitive about changing medications, but there is a real opportunity to save money when you make these adjustments. Contracting with a restricted network, such as an HMO, and introducing wellness initiatives can also reduce costs.

What do employees need to know?

If you change a plan design in any way, it is important that the changes be communicated clearly.

Employees are very resistant to a change in their health care benefits. If you are planning to reduce benefits or shift costs to the employees, make a significant commitment up front to educate your employees.

Simplify the message and commit the time and resources to help them understand the changes before the new contract year begins.

Randy Narowitz is the CEO of Total Health Care. Reach him at (313) 871-2000.

Insights Health Care is brought to you by Total Health Care

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