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9:33am EDT July 22, 2002

Sure, price matters.

But don't let the dollar signs blind you from seeing how disgruntled your employees could be if you choose the wrong health care plan.

"Employers are hearing about problems dealing with claims and claims processing," says John Kirsner, a Squire, Sanders & Dempsey LLP employment law associate. "Employees don't get through in customer service, or they get voice mail, not a person. And probably more significantly, especially from the employee point of view, is denials of medically needed health services."

Lack of coverage is one of the reasons why a client of Victoria Green, an employee benefits broker, recently went shopping for a new HMO.

"The plan did not cover gynecological visits -- in or out of the physician network. For a new hire, it's a rude awakening to go for a gynecologist visit and get a bill that says it's not covered," says Green, owner of Green Insurance Agency in Westerville. "You've got to keep on top of those things. Most of the carriers cover it, but if you have an older policy, chances are it may not."

Barry Shaffer, senior vice president of OhioHealth Group HMO Inc., says he would advise business owners looking for a health care plan to use a broker or consultant.

"They should not just shop based on price," he says, "but look at what's being offered, what's behind the plan, how easy it is to get access to physicians, those kinds of things."

Do your homework

Finding an HMO plan for your employees is not as simple as making a few phone calls, says Kirsner, who acts as both counsel and an advocate for insurance companies, health plans, managed care organizations, hospitals and other health care providers and governmental organizations. His suggestions:

Go to the Web sites of each of the health care plan providers you're considering to get a handle on the basics.

Use other Web sites that evaluate health plans. For example, the National Commission for Quality Assurance, www.ncqa.org, is a nonprofit organization that holds plans to accountability standards.

"Ask if the plan is NCQA accredited; if not, that ought to tell you something," Kirsner says.

Ask to see the provider's annual survey responses, which measure patient satisfaction.

Shaffer says his company's National Commission for Quality Assurance accreditation requires those surveys annually, and employers can ask for results for their own employees or for OhioHealth overall.

Question the provider. Ask about prices, but also find out about the benefit packages available, how the claim processing system works, how the provider denies services. "Sometimes they have to," Kirsner says. "Not everyone needs a heart transplant."

Green says employers need to find out about the differences between plans.

"There can be intricate parts of the policy a lot of people are not aware of, and it can make a huge difference as to how the policy works for your employees," she says.

Shaffer suggests additional questions: "What kind of rate increases can we expect in the future? What about medical trends? What kind of data will you give us to help us evaluate your program? Is it a local service? Do you have a restricted network, where we can only go to certain doctors or hospitals?"

For the sake of your employees, select a plan with options.

"In our case, we have about nine different plan choices in HMO, and we also have a point of service product, which allows them greater flexibility and freedom of choice," Shaffer says. "Depending on which they select, the price will be different, and they can mix and match a lot of them."

"Make sure you have enough physicians and enough hospitals to choose from that it doesn't look like you're providing an illusory benefit," Kirsner adds.

Be prepared to answer the provider's questions.

Providers will ask for your census, or the demographics of your employees, and the coverage and claims you've submitted in past years, as a basis for the rates you'll be charged, says Green.

You'll also need to give them your line of business, generally described by your SIC code, and the locations of all of your operations.

One of Green's most challenging clients has locations in Cleveland, Cincinnati, Toledo, Cambridge and Columbus.

"One of the problems I have every time I go out looking for their coverage at renewal is making sure the network that particular insurance carrier offers is good enough for each particular location," she says. "One might be good in Columbus but horrible in Toledo."

Ask for help. If you trust your insurance agent with your other policies and he or she has enough knowledge to help you on the health side, don't overlook the assistance, Kirsner says. Your company attorney also can offer guidance, as can chambers of commerce.

Beware of pitfalls

Kirsner says an increasing problem in the health care industry is plans facing financial difficulty.

"Ohio has gotten a bit of a reputation for health plan failures," he says.

Again, a little research can raise the red flags.

The Ohio Department of Insurance is one source of information, Kirsner says.

Rating services, such as Standard & Poor's or A.M. Best, also can indicate whether a plan might be in trouble. Although you might want to think twice about a plan with a low rating, Kirsner says, don't write it off altogether. It might have an extremely strong parent company.

"You have to ask the questions," he says. "Challenge the health plan: 'I'm asking all the health plans this -- Why is your rating where it is?' Leave it to them to explain, and decide if you buy that explanation."

Don't stop there

Once you've selected a plan, you can't sit on your laurels.

First, Kirsner says, sell it to your employees.

"It's important that if an employer is entering into this, they have meetings with the employees," he says. "And highlight the cost -- even if there's an employee match -- to show that it's a big investment" for the company.

When the plan is up and running, continually monitor it by listening to employees, keeping up on news related to the provider you've chosen and revisiting the Web sites of your research.

Many plans are quite standardized, but some allow room for negotiating benefits and costs, Kirsner says. The Ohio Department of Insurance has to approve every policy issued in the state.

"Your defense has to be due diligence," Kirsner says, "and looking at lots of different companies." How to reach: Victoria Green, Green Insurance Agency, 882-1876; John Kirsner, Squire, Sanders & Dempsey LLP, 365-2722 or www.ssd.com; Barry Shaffer, OhioHealth Group HMO Inc., 566-0260 or www.ohiohealthgroup.com

Joan Slattery Wall (jwall@sbnnet.com) is associate editor of SBN Columbus.

What you can do

  • Visit the Ohio Department of Insurance Web site, www.ins.state.oh.us, for details regarding all types of insurance. Visit the "Consumer Information" section for Shopper's Guides to health, auto, life and homeowner insurance; managed care and annuities; and long-term care and Medicare supplement insurance. The department's phone number is (800) 686-1526.

  • Check ratings of insurance companies' financial strength at Standard & Poor's, www.standardpoor.com/ratings/insurance/index.htm, or A.M. Best Co., www.ambest.com/guide/index.html. Weiss Ratings Inc., www.weissratings.com, also offers information but charges a fee.

  • Visit the National Commission for Quality Assurance, a nonprofit organization that holds plans to accountability standards, on the Web at www.ncqa.org.