To provide or not to provide? That is the most pressing health insurance question facing companies across the country this year. As implementation of the Affordable Care Act moves forward, many businesses are making strategic decisions regarding health care benefits. Those that have sponsored health insurance for years are now considering dropping coverage and reallocating resources.
But what are the true costs of dropping coverage? While the questions may be simple, the analysis can get fairly complex and extend beyond easily identifiable costs.
Smart Business spoke with Sholly Nicholson, human resources manager at Sensiba San Filippo LLP, to examine some of the most important health care questions businesses face this year.
How should businesses approach their health care coverage decisions?
It is critical for any company to evaluate health care coverage based on the anticipated impact it will have on the entire organization. That means considering both easily recognizable and potentially hidden costs associated with sponsoring or dropping coverage. Will dropping coverage negatively affect your ability to attract and retain talent? Will it result in a loss of valuable personnel, and if so, to what degree?
What are the benefits to providing health care coverage?
Depending on the nature of your business, employer-sponsored health care plans might already be expected. It’s possible to drop coverage and increase employee pay to allow them to choose their own plans on the health care exchange networks. However, continuing coverage can be a critical part of strategic planning.
Employer-sponsored plans provide control over the plan’s design and benefits available to employees. If you operate in an industry with heated competition for a limited talent pool, selecting and managing your plan could provide a competitive advantage. With current uncertainty regarding exchange health plans, employees may feel more comfortable knowing that your organization is selecting a plan that allows them access to the doctors and hospitals they want.
What can companies do to control rates?
If you decide to offer health care benefits, managing costs will be critical moving forward. Get as many quotes as possible. Insurance providers are always offering new plan designs and premium pricing.
Incentives can be offered to employees who participate in annual health risk assessments, biometric screenings or other wellness initiatives. Promoting health and well-being through education, exercise facilities and nutrition initiatives can have a long-term effect on the number of claims incurred, which will have a significant effect on your group rates.
What should a company consider when designing its plan?
Not all plans are created equal, and the organizational benefits of a well-designed and well-managed plan can be substantial. It’s important to look closely at the provider network.
Will your employees be covered by the primary care physicians they want? Will they have access to the best hospital facilities? Smart companies review residential locations and current providers of their employees before making any changes.
The structure of the plan can also be important. To balance costs and benefits, many companies are moving toward high deductible plans combined with health savings accounts (HSAs). The high deductible plans keep premiums under control, while HSAs allow employees to set aside money pretax to offset deductibles.
What’s the best advice you can provide regarding health care coverage decisions?
The health care decisions you make today will have a profound effect on the future of your organization. A happy and healthy workplace will be productive and profitable.
The right answer is unique to every company, but the best approach to finding that answer is consistent: Expand the scope of your analysis and conduct a broad investigation in order to discover how your health care decisions will affect your company moving forward. If you consider all of the ramifications of your decisions and align your strategy with your desired outcome, you will find the best solution for your employees and organization. ●
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