5 Tips: How to choose a health plan for your business
Jul 01, 2016 at 1:20 PM
Selecting the right health care plan for your company is an extremely important decision.
In a Glassdoor survey, 57 percent of respondents said benefits are among their top considerations when deciding whether to accept a job offer, and they ranked health care as the most important.
Human-resource professionals should view health plans as a vital tool in their employee retention and recruitment strategies, according to the Society for Human Resource Management (SHRM).
But choosing a health plan can be tough. Your employees all have different needs, and insurance carriers offer a wide range of options. Here are some important factors to keep in mind as you wade through the choices.
An employer's bottom line is always cost, says Sarah Sybor, director of account management at Evergreen Health, a nonprofit health co-op established in 2012 to provide high-quality, affordable, patient-centered health care in Maryland.
Health care costs continue to rise, and all carriers have been increasing their rates every year. One silver lining for employers is that health plan costs are tax-deductible.
After determining what you can afford, visit carrier websites to see what options you can get for your money. It's also a good idea to look up insurers' ratings, which are published by five agencies: A.M. Best, Duff & Phelps, Moody's, Standard & Poor's and Weiss Research.
2. Give employees a choice.
Once you've selected a carrier or carriers, you still have many options for a plan — or several plans. It's a good idea to provide employees with a choice, especially if you have a demographically diverse workforce.
"Needs, value and the ability to pay differ dramatically among employees," says Anne O'Brien, a consultant and insurance broker at Baltimore-based McQuade Consulting, which helps companies devise affordable benefit programs that attract talent. "If you have a company full of 25-year-olds, they might be much happier with a vacation than a low-deductible health plan."
"It's a good idea to survey employees every year to find out what they want, then choose a variety of plans to meet their needs," O'Brien says.
Try to avoid hospital indemnity policies and dread disease policies (also known as critical illness insurance), advises FindLaw, which advises businesses on legal topics. Hospital indemnity policies often don't pay enough to cover the typical daily cost of a hospital stay, and dread disease policies are very expensive and aren't often used.
3. Consider a wellness program.
Encouraging employees to lead healthier lifestyles can reduce the incidence of chronic health conditions, helping organizations as well as employees save on long-term health costs, the SHRM reports. In a SHRM survey, 83 percent of employers agreed that wellness and disease-management programs lead to better control of health care costs.
Wellness programs can take many forms. For example, Evergreen Health offers discounts on gym memberships and is developing an app that members can use to manage benefits online. "It will remind you when it's time to refill your prescription. You can have all the information for a family in one place — it's a one-stop shop," Sybor says.
Additionally, a good wellness program can increase worker productivity, boost morale and reduce stress.
Wellness programs not only keep employees healthy, they foster camaraderie, O'Brien adds. "Whether you have a walking club or a yoga class or you talk about nutrition, it lets people get to know each other better, and it crosses the line between managers and employees," she says.
4. Pay attention to drug benefits.
"Prescription drugs are one of the most frequently used benefits," Sybor says. Each carrier covers different drugs, and their list (called a formulary) changes every year. Drug coverage sometimes has deductibles separate from those of health care visits, and there are many levels of co-pays.
Again, it's important to find out the level of coverage your workers want. "Some employees are very vocal as to how much they want to spend on prescriptions," Sybor says.
"Evergreen offers a program that provides low or no co-pays to people with chronic ailments who verify through submitting prescriptions that they are taking their medications," O'Brien says.
5. Check the quality of their customer service.
"It would be nice if all carriers offered excellent customer service, but unfortunately, that's not the case," O'Brien says. Some insurers, like Evergreen Health, pride themselves on getting problems resolved on the first call, and follow up with customers to make sure everything is OK. But with others, employees might wait on the phone for 30 minutes and still not get their questions resolved. "If your employees are constantly on hold and constantly miserable, they'll complain to others," Sybor says. When employees complain in the lunch room and talk to HR about poor service, the company will be less likely to renew the plan the next year.
To best judge customer service, talk to an insurance broker and ask your peers at other companies about their experiences. And in case you're wondering: It's easier to choose the right plan to begin with than to switch later on.