Choosing a health insurance plan for your business can be an overwhelming task. As a business owner or administrator, you’re already knee-deep in handling your business’ other pressing backend responsibilities. When there are so many options and items to consider, where do you begin when purchasing group health insurance?
While we cannot tell you what plan is best for you right off the bat, we can give you some suggestions on what important questions to ask – to both your agent and yourself – when purchasing group health insurance. When shopping for group health, consider the following questions:
Which plan is the best option for my business?
Depending on the carrier, most providers offer several different group health insurance plans. These vary by benefits and design. You may be eligible for a variety of different plans.
- Point-of-service (POS)
- High-deductible health plan (HDHP)
- Health maintenance organization (HMO)
- Preferred provider organization (PPO)
Each plan is very different and may offer different benefits. If you are unsure of what plan is the best for your business, discuss with a Hitchings Insurance Agency representative as some plans may be better for your business than others. You may be able to purchase more than a single offering for your employees to choose from so that you can diversify and present multiple benefits to your workers.
Who will be eligible for coverage under a group health insurance plan?
As the business owner or plan administrator, you will need to determine – first of all – who will be eligible for coverage under your group health insurance plan. You’ll likely want to have coverage yourself, and probably for your spouse and/or dependents as well. But which employees? Depending on your plan, you may not be obligated to insure part-time employees and only full-time employees will qualify, such as those who work 30 hours a week and over. You cannot pick and choose who will be covered within a certain category – you should include anyone within a specific category. You may also choose whether you wish to extend coverage to your employee’s dependents as well.
Consider the specific health needs of your employees. Some may need maternity coverage, prescription drug coverage, and routine doctor visits. Without diving into their personal health records or asking them any private questions, consider going around and discussing with them what health coverage would be most beneficial to them.
How much do you plan to contribute towards monthly premiums?
What is your personal budget when it comes to contributing towards your group health insurance monthly premiums? Employers are almost always required to make contributions, which is usually around 50%. The remainder is on the covered employee. If your employee’s spouse and/or dependents are covered as well, there are fewer restrictions around how much the employer is required to contribute. Note, however, that while it may seem expensive to contribute as much as 50% or more towards your employee’s plans, your contributions will be tax-deductible and the payoffs for offering great coverage plans are invaluable.
What will your plan cover?
With group health insurance, you may have the option of additional benefits, such as vision and dental insurance. You will want to ask for a breakdown of what you may be eligible for and what is included in your standard policy. Some add-ons are worth the purchase because employees will statistically opt for lower-paying jobs that have better benefits, especially those that offer group health plans with included vision and dental. Vision and dental insurance are important to consider if you’re willing to dish out a little more for the extra premiums as they have been proven to improve retention, reduce absenteeism, increase profitability, and increase productivity in a business.
You may also wish to survey your employees and ask them about what benefits are most important to them. This can influence your decision about whether or not to include dependents and spouses in your plans.
How much will your group plan cost you overall?
Contributions aside, group health insurance may cost you a different amount depending on a range of different factors, which include:
- Type of work you do
- Employer’s insurance history
- Average age of your workers
- Number of employees
- Health of your employees
- Types of coverage you choose
- Any add-on benefits, such as vision or dental
Note that different lines of work carry different levels of risk, and the provider through which you are planning to purchase your plan will also make a difference. On average, according to a survey from 2016, the average premium for larger firms with 200 or more workers as family coverage was around $18,000 to 19,000 for all plans. For single coverage, average plans were about $6,000 per year.
Will you have monthly premiums or “cost-sharing” options?
When selecting a plan, you may choose to have employees pay more up-front costs and less when they fall ill or are injured – or the opposite. You may opt for a monthly premium, which is a required payment in order to maintain coverage. If you choose cost-sharing, it only kicks in if you require healthcare. Cost-sharing can look like paying deductibles, co-insurance, and co-payments. If you find that your employees rarely require prescription drugs, are younger, or rarely visit the doctor, it may be more beneficial to opt for higher cost-sharing and lower monthly premiums. If the opposite is true, then you may opt for lower cost-sharing and higher monthly premiums. It all depends on the pool of employees being insured.
Exploring group health insurance by yourself can be overwhelming. If you are still unsure as to what you need for your organization or you would like to be presented with options, you may wish to discuss it with a Hitchings Insurance Agency representative for more information. They can help review your personal circumstances, your business, and your budget to offer you plan options tailored to you.