Tips To Help Your Employees To Choose Their Health Benefits Wisely
While the majority of the healthcare reform provisions do not take effect until 2014, there are several mandates added in 2010 that will drive up premiums. Now is the time to begin to build your long term strategy. Here are several points that will help you keep your increases under control.
1. If you currently have a group major medical policy, keep it in “Grandfathered” status if possible. This will permit you to avoid a policy that contains new mandates that will have significantly higher premiums. Beginning in October 2010 there will be a mandate to offer a list of preventative care at no co-pay or deductible. The list is quite long and while it will be a popular benefit it does come at a financial cost. A “Grandfathered” plan will not be required to offer this enhanced list of preventative care.
2. Consider moving to a Consumer Driven High Deductible Plan as this will be a preferred and cost effective model when the market shifts in 2014. One of the inherent weaknesses of our current insurance structure is that it over insures a large segment of the group. Younger employees tend to rarely go to the doctor but have the same benefits that older employees have. In this case, the employer pays the high cost whether or not the services are utilized. A Consumer Driven High Deductible Plan will cover all employees for a catastrophic event. This plan can be coupled with a reimbursement for some or all of the out of pocket deductible. The advantage is that the employer only pays the reimbursement when the services are actually used. Getting your employees comfortable with the concept will make for a smoother transition.
3. Utilize Consumer Driven Individual High Deductible Plans for your employees not on the group insurance policy. This can be done on a tax favorable basis for the employee with or without an employer contribution. These policies are underwritten for health so they are generally much less expensive than the group insurance premium. Many companies will move to offering individual plans in 2014 since they will be required to accept all employees for coverage. Due to the subsidy and penalty system that will kick in, the cost structure will make more sense for the employer and in many cases the employee than the current group health insurance system.
4. If you do not provide health insurance benefits but want to or are considering dropping your group plan then consider a Defined Contribution Plan. These plans allow the employer to set a controllable budget by setting a fixed contribution for employees. There are no requirements or restrictions to contributions as there are with group insurance policies. With this approach each employee chooses an individual policy that fits their specific needs.
And now that your have 4 strategies I would like to invite you to claim your FREE Instant Access to my special report Affordable Healthcare “A New School” Approach to Controlling Costs at http://www.bestinsurancedesign.com/AffordHealthReport.html
Best Insurance Design that specializes in helping people take control of their health benefits. First we help employers define and control their health benefits spending. Second we assist employees in choosing how to spend their health benefits dollars wisely. This is done in a unique and different way from any approach out there.
Filed Under: Health Insurance
