Health care coverage creates a lot of angst for employers who prefer to focus on selling more products and services that generate additional revenue. But leaders who try to put off dealing with the latest changes to the Affordable Care Act simply to avoid the hassle are only asking for more trouble down the road, says P.J. Insana, a partner at Britton Gallagher.
“You’re going to have a headache one way or the other,” Insana says. “If you choose to do nothing, you end up with rising costs and frustration all around to the point where you are forced into a major overhaul that creates even more anxiety. Or you accept that you’re going to have a short-term headache, but you take action to get both you and your team educated and informed about your health care options so that you can find a workable solution.”
Further complicating matters is the fact that employers often base their decision to put off taking action on faulty logic and beliefs that don’t reflect reality.
Smart Business spoke with Insana about a few of these health care myths and why a little knowledge can go a long way toward easing your stress.
Myth No. 1: Companies with fewer than 50 employees think they’re too small to be self-insured.
The big fear for small employers is that an employee will require major surgery or be stricken with cancer or another illness that requires expensive treatment. How can you possibly cover this cost without crippling your business?
The reality is that being self-insured offers protections similar to what you would find in any insurance policy. You assume the first $500 or $1,000 of risk or X amount of claims that come through your plan. You also have employee cost sharing such as a co-pay and/or a deductible.
You purchase stop-loss insurance, which serves as protection against expensive claims, and you have third-party administrators to help facilitate and administer your claims.
It might seem easier for smaller companies to go find an insurance carrier and say, ‘Here’s my population. Give me some premium for coverage.’ That’s a model that many smaller companies have followed.
But another benefit of the self-funding mechanism is that you own the information. Once you’re self-funded, you own your claims data and have access to it. This makes you and your benefits consultant better equipped to make changes or implement programs that drive your health care costs down.
Myth No. 2: My employees aren’t savvy enough to deal with a health savings account.
If your employees have the skill set to perform their jobs, they have the skill set to understand how to become a better consumer. But the myth persists that a health savings account would just be too difficult for employees to understand.
It’s an area where employers in the past have failed because they don’t make the effort with their human capital to educate and communicate. Maybe your employees don’t understand health savings accounts or don’t want to deal with the change. They might feel differently if they knew all the facts.
It’s time to challenge leadership and ownership to be more aggressive when it comes to making these kinds of decisions.
Health savings accounts perform a number of functions. A primary benefit is that they get employees to put money aside on a pre-tax basis to pay for health care claims.
By actively putting money aside, the employees are more engaged in the medical and health choices they make. This knowledge can reduce their out-of-pocket costs as well as claims costs to the plan.
Myth No. 3: My employees don’t appreciate the benefits the company provides.
If you are not putting forth the time and effort to communicate the benefits of your plan with your employees, you really can’t say that they don’t appreciate it.
Bring in providers or advisers not just once a year, but on a consistent basis. Communicate electronically. Take surveys to take the temperature of how they feel about various aspects of your plan.
You can never do that enough. If leadership talks about the plan and engages employees and families to get them more involved, the benefits can be positive. But both parties have to work together.
Insights Employee Benefits/Risk Management is brought to you by Britton Gallagher
