When you are deciding on a health insurance plan, it is important to understand the different types of coverage available. Group health insurance is the most common type, covering the majority of workers through their employers. Employers and organizations can usually obtain better rates because they are covering a group of employees. The group health insurance plan covers all employees, regardless of their health. Individual insurance, on the other hand, is generally a more expensive option. The application process requires a physical exam or health questionnaire, so poor health can increase the premium costs.
As an employer, you are not required by law to provide health insurance to your employees; however, you may find you have a harder time attracting and retaining good employees if your benefit package does not include health insurance. While you may not like the cost of providing group health insurance, you should understand the benefits your company receives in return, including improved morale.
The main reason most employees want a group health insurance plan is to ensure that they and their family are covered in the event of a medical need. Without a group health insurance plan through their employer, many people simply cannot afford individual health insurance and will go without insurance. Also, due to family history or medical conditions, many people simply cannot qualify for individual health insurance. Without health insurance, many employees either forgo necessary medical care, or they can be financially devastated by an illness or injury. For your employees, the main benefits of a group health insurance plan are that the premiums are lower than with an individual plan, and they cannot be excluded for health issues.
When you are thinking about which plan to offer your employees, consider their needs, your business’s needs, and also your own needs as a consumer. Don’t forget that you will also be covered by the same plan, so as the employer, you will want to balance your company’s need to save money while still offering an attractive group health insurance plan for yourself and your employees. Key questions to ask yourself include:
- Do you want the plan to cover preventative care such as annual check-ups? Most fee-for-service plans do not cover these visits, while managed care plans do. This is especially an important consideration for families with children.
- How healthy are you and your employees? There is a trade-off between lower premiums and higher deductibles. For healthier employees, a higher deductible might make sense; however, accidents and injuries can still occur, which could financially devastate employees if the deductible is too high.
- Do you want to offer a single plan or multiple options? Many employers offer a choice of plans, with lower premiums, higher deductibles, and reduced benefits in one plan, and higher premiums, lower deductibles, and higher levels of coverage in another. This lets the individual employee review his or her own health and financial situation. This also helps employees who want to use a specific doctor or hospital, one that might be excluded in a managed care plan.
- Do you want to offer easy access to specialists? Managed care plans usually require a referral from the primary care physician before allowing the patient to visit a specialist. Fee-for-service plans usually allow patients to self-refer to a specialist, although they may require a higher co-pay.
Your company’s health insurance rates are renegotiated every year, based on the health care costs incurred the previous year. For this reason, many employers have chosen to provide wellness programs to their employees. If your employees are healthier, their medical costs are lower, and your health insurance rates will be lower. For employees who participate in wellness programs, you can reward them with lower insurance premiums, either reducing or eliminating the amount they pay. Other plans work in reverse; for example, employees who smoke will pay a higher premium than other employees. You can even work these in combination, offering free stop-smoking support, while penalizing employees who choose not to quit. Of course smoking cessation is not the only wellness program you can offer. Stress management classes, on-site yoga or exercise classes, weight loss courses, and free or reduced cost flu shots are all examples of wellness programs that are designed to improve your employees’ health and reduce your costs. In addition to reducing your health insurance costs, you can also benefit from reduced employee absence due to illness.
As with any contract, make sure you read it carefully and complete the paper work correctly. Be sure that you address any concerns or questions before signing the contract.