Health plans are complex. They’re often loaded with so many details that it can be difficult to focus on the issues that are most important for you as a small business owner. Generally speaking, the main points to consider boil down to the plan’s benefits, cost and choice. Remember these three main issues when evaluating and comparing plans.
To go a step further, be sure to answer the following questions when considering a plan:
- What services does the plan cover? You’ll want to make sure the plan benefits include the services most important to you and your employees. (Also keep in mind that, typically, the more that’s covered, the more the plan will cost.)
- What physicians and hospitals can participants use? Managed care plans typically limit participants to a network of providers, and charge more if participants visit providers outside the network.
- How much will the plan cost per month? The monthly premium is a primary concern for most employers.
- How much will the participants be charged at the time of service? Besides the monthly premium, many plans involve what’s known as “cost-sharing,” where participants pay a fee at the time of service (a copayment) or a percentage of the total cost (called coinsurance).
- Can participants choose among more than one health plan or benefit package? Choice among health plans is a feature of buying insurance through a purchasing alliance, which we discuss in Part Two: Getting Covered. Increased choice is generally preferable, but may cost more. Some carriers allow small businesses to offer their employees choice among multiple benefit packages. Under such an arrangement, some employees might choose a high-deductible PPO product, others a low-deductible PPO, and still others an HMO. Insurance carriers that provide a choice of products may require that they be the only carrier offered in the group.
- Is the insurer a quality company? Be sure to consider the insurer when evaluating plans. Is the company financially solvent? Does it provide quality care? Does it offer excellent customer service?