Offering a choice of plans, having a sensible contribution strategy and providing employee education can hold costs down and satisfy employees.
Choice, choice, choice
Offering a choice in benefit plans, choice in network access and choice in monthly costs are some of the best ways to keep health care costs affordable. Whether you have 20 employees or 1,000, find a health benefits company that can offer you several plans for employees to choose from.
Typically, employers offer very little choice in health benefit plans. Successful benefit administrators understand that every employee has unique health care needs. Why not offer employees three or four plans to choose from?
The level of benefits employees choose will relate directly to how much they utilize health care services and what they can afford.
Most health benefit companies offer the following types of plans.
Traditional HMO. Lowest-cost plan, all care is coordinated by a primary care physician; employee must stay in network
Open access. A slightly higher-priced plan allowing the employee the freedom to self-refer to specialists in the network. More freedom equals a higher cost.
Point of Service (POS). A less affordable plan for most, with more freedom; employee can access HMO benefits/network and/or pay higher co-insurance and choose any doctor
Preferred Provider Organization plan (PPO). Greatest freedom, highest cost; total network access and out-of-network benefit, self-refer to specialist
Developing a contribution strategy
Now that you have decided to partner with a carrier that can offer your employees the choices they need, how do you stay within your company’s budget? The answer is simple �" be fair and consistent by implementing a defined contribution strategy that fits your company’s budget. This process can be accomplished in two easy steps.
1. Determine what dollar amount per employee your business can afford.
2. Select a carrier that can offer you four plans that will satisfy your employees’ health care needs.
Here’s an example of how a defined contributions strategy could work for you (based on a health benefits budget of $180 per employee, per month).
In the example in the chart above, your company accomplished two very important goals: You controlled your company’s costs and you offered your employees choices.
With a defined contributions strategy, your employees are responsible for evaluating what they need and how much they are willing to pay.
A choice of plans with a defined contribution strategy is two-thirds of the employer’s cost saving equation. By adding employee education, you could see a change in behavior that can lead to significant savings. The more informed employees are about the true cost of health care and how their choices directly affect their pocketbook, the more likely they are to become “partners" in controlling costs.
Most health benefit carriers provide members with an Explanation of Benefits for all claims processed, which contains the cost of services. Web-based tools offer plan information and are user-friendly. At workshops and mandatory open enrollment educational meetings, employees can speak directly with a carrier representative.
As health insurance premiums continue to rise and more employers face very difficult decisions, offering a choice of plans can keep your employees happy and satisfy your bottom line.
As an employer, you want to provide good coverage, but the cost increases in recent years have been tough to handle. A typical response to these increases may be to select a high-deductible insurance product that lowers your cost. However, there is a better solution.
Think HMO. That’s right �" health maintenance organizations. The HMOs of today offer a whole new generation of health care financing tools that every employer should consider.
It’s not your father’s HMO.
You may have heard bad stories or had a rough experience in the past. However, times have changed. HMO plans today offer extensive provider networks, excellent coverage for preventive care, the ability to frequently change a primary care physician and outstanding prescription drug coverage through broad pharmacy networks.
HMOs take the surprise out of the bill.
With most health insurance plans, an employee is responsible for a percentage of the cost of care, often 20 percent or 25 percent. This can add up very quickly, and employees can’t predict what their expense is going to be.
With an HMO structured co-pay plan, an employee knows up front the expenses associated with most covered services. For example, an employee may have a $20 copay for a primary care physician (PCP) visit, which will include all services provided in that visit. Each time employees go to their PCP, they can expect to pay $20 �" no surprises there.
Higher co-pays offer savings.
The days of nickel sodas and 25-cent phone calls are long gone �" and so are $5 and $10 co-pay plans. It’s time to rethink the value of co-pays. New HMO plans have higher co-pays, some as high as $30 for a primary care visit and $50 for a specialist. But that covers all services provided during that visit. That’s a valuable cost limit these days.
HMOs offer bold new designs.
New HMO plans have fresh cost-sharing strategies that provide low employee out-of-pocket expenses in some areas while controlling your costs by increasing employee expenses through deductibles in other areas.
In most deductible-based plans, employees have a high deductible that applies to all services. However, with these new focused-deductible HMO plans, the deductible is limited to specific services, such as hospital care or prescription drugs. After the deductible is satisfied, a co-pay also applies to that service.
Furthermore, with these plans, employees continue to have a co-pay instead of a deductible for highly utilized areas such as physician or specialist visits.
HMOs are FSA and HRA compatible.
Many HMO plans can be used with flexible spending and health reimbursement accounts, enabling employees to decide how some of their health care dollars are used. Many carriers are also developing health spending account-compatible HMO plans.
HMOs offer more than health insurance.
Today’s HMO plans offer health improvement programs such as discounted fitness club memberships and valueadded options that let employees take charge of their own health.
There are two primary reasons to revisit today’s HMO �" savings to you and savings to your employees. Rediscover today’s HMO �" you’ll be pleased with what you find.
Both Cathy Aguirre & Stephen Russell are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Cathy Aguirre has sinced written about articles on various topics from Insurance. CATHY AGUIRRE, vice president of account services for Vista Health Plans Inc., has more than 18 years of experience in managed care marketing. Aguirre provides leadership for all of VISTA’s commercial accounts, which include Broward County government, The. Cathy Aguirre's top article generates over 1600 views. to your Favourites.
Stephen Russell has sinced written about articles on various topics from Insurance. STEPHEN RUSSELL, a health care industry veteran with more than 35 years of experience, joined Vista Health Plans Inc. in 2002. As vice president of product development, he is responsible for product design and implementation, and contract compliance activ. Stephen Russell's top article generates over 480 views. to your Favourites.