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Chen owns Sunrise Spa, a day spa that employs three full-time employees, Justin, Elissa, and Miguel. Chen wants to purchase a group policy to cover her, the employees, and their families but she is concerned about the costs. All the employees would like health insurance—particularly Justin and Elissa who have small children—but they want to avoid out-of-pocket costs and paperwork.
In talking to a broker, Chen learns that she can have her employees pay up to half the cost of the monthly premium through their paychecks, and that the cost for dependents can be fully paid by the employees. Her broker also tells her that, generally speaking, the greater the copayments or co-insurance her employees are responsible for paying whenever they get care, the less the monthly premium will cost.
Chen decides that to make a plan affordable, she will have her employees cover half the cost of the employee-only premium and the full cost of the premium for dependents, through their paychecks. Chen also wants her broker to look for HMO plans with copayments in order to bring down the cost of the premium. Copayments will be more acceptable to her employees because they are more simple and predictable than co-insurance.
Mike owns a computer supply and repair shop, Complete Computer. He has three full-time employees, Arturo, Liz, and William, who are key to his business. Mike, Arturo, and Liz all have spouses and children. Mike also employs two part-timers, Bob and Daria. Finding good employees is tough for Mike, so he wants to offer group coverage to help retain his key full-time employees, and to pay for as much of the plan as he can.
Mike decides he wants to cover the full cost of the employee premium and 75 percent of the cost of the premium for dependents. To keep the premium affordable, Mike asks his broker to look for PPO products with deductibles and co-insurance. He also asks the broker to provide him with other cost-sharing options, such as tiered pharmacy benefits that can help keep the premium down. Finally, he decides that he will not offer coverage to his part-timers so that he can pay the most towards the coverage for his full-time employees, whom he cares most about keeping happy and healthy.
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