Designing the right health benefits plan for your employees is a complex task. There are many issues to consider, including tax and legal aspects, funding, finding the insurance carrier and striking a balance between your employees’ needs and affordable benefits.
Smart Business spoke to Eugene Sun, M.D., M.B.A., vice president of Medical Affairs at HealthAmerica, about how employers can choose a health benefits program that works for their company.
How should an employer go about choosing a health plan?
It’s a smart idea to look at all health plan options available. Sometimes employers stick with the same carrier year after year for no reason other than it’s the one they’ve always had. Changing insurers is well worth the effort if you find a health plan that offers strong service along with lower costs at the same or better benefits.
Next, start with your employees and find out what they want. It’s helpful to know up-front the types of benefits they think are important, what coverage options to include, what co-pays will look like and so on. Discuss these issues with your employees and, since you won’t be able to please everybody, be sure to manage expectations as well.
What is the best source for learning about insurance products?
Many small businesses find it helpful to work with an insurance agent or broker. Most health carriers employ licensed, knowledgeable marketing representatives who can provide a full explanation of the choices, benefit offerings and costs. They can help answer questions such as:
- Is the insurance carrier licensed, accredited, reputable and financially secure?
- How often are policies renewed?
- Is the plan easy to administer?
LI> Are claims processed and paid quickly?
- Does the insurer provide educational and other communications materials to employees?
- Does the plan provide sufficient financial incentive to encourage employees to select network providers?
What are the next steps for choosing a plan?
After you receive a price quote, it’s wise to collect proposals from several insurers. This should include information about their customer services and claims-paying abilities. When comparing health care plans, consider such criteria as:
- How much will it cost the company on a monthly basis?
- Should you insure just for major medical expenses or for all medical expenses?
- Are there deductibles to pay before the insurance starts to pay?
- After the deductible, what costs are covered by the plan?
- How much more does it cost to see a provider outside the plan?
What types of medical benefits should employers consider offering?
A good rule of thumb is to offer employees the same benefits you would want for you and your family. When gauging the scope of coverage, consider the following:
- What doctors, hospitals and other providers are part of the plan?
- Are there enough of the kinds of doctors you would expect to have?
- Are the providers located conveniently for your employees?
- Does the plan require permission for specialist referrals?
- Are there limits to how much will be covered by the plan?
- Does the plan cover the expenses of delivering a baby?
- Does the plan cover prescription drugs?
- Does it cover drug and alcohol treatment, mental-health care, home health care, hospice care, physical therapy and experimental treatments?
How can you be sure if you’re dealing with a reputable insurance carrier?
Employers have several resources available for evaluating the quality of a health plan. Consumer surveys, like those published by U.S. News and World Report, are based on standardized reports of patient satisfaction. The National Committee of Quality Assurance (NCQA), the nationally recognized body for health plans, publishes a major survey called the Healthcare Effectiveness Data and Information Set or HEDIS. This comprehensive report standardizes data and measures how well health plan providers are following clinical guidelines for diseases such as asthma, diabetes, high cholesterol and heart disease. Although HEDIS is not free to the public, you can ask your carrier for their results.
In addition, the Pennsylvania Health Care Cost Containment Council (PHC4) publishes an annual report, Measuring the Quality of Pennsylvania’s Commercial HMOs, comparing the quality and value of Pennsylvania’s managed care plans. It is helpful in evaluating the utilization, clinical outcomes and member satisfaction among health plans in the state. The report is available online at www.phc4.org.
EUGENE SUN, M.D., M.B.A., is vice president of Medical Affairs at HealthAmerica. Reach him at email@example.com or (412) 553-7549.