HEALTH INSURANCE GUIDE FOR SELECTING GROUP INSURANCE
Finding affordable health insurance, which offers good coverage for your employee, your business partner, yourself and family should be your main focus. There are many plans offered from Anthem Blue Cross, Kaiser Permanente, Blue Shield, Aetna, Cigna, United Health Care, Healthnet and other providers. For individual plans, you easily have a choice of 70 plans, and for group insurance the choice can be even higher.
The Kaiser Family Foundation published in their 2010 Summary of Findings research that employer sponsored health insurance premiums for a family of four has more than doubled in the last decade. The premium of an employer-sponsored health insurance premium for a family of four grew from the year 2000 at $ 6,438 to the year 2010 at $ 13,770.
Important Questions to be asked while selecting “Group Insurance”
- What is the budget your company has set aside for Health Insurance?
- Do I offer my employees “Freedom of Choice” by selecting their doctor or hospitals
- ( PPO ) or do they have to select a primary care physician (PCP) , who will be their gate keeper and provides basic medical care and if refers to medical specialist if needed.
- ( HMO ) (see also 101 on HMO vs. PPO)
- How much am I, the employer, willing to contribute to my employees’ health insurance? You have two choices a) a percentage contribution or b) a nominal contribution. Many small companies choose to give a nominal contribution, for example $ 100.- to be able to have a permanent “fixed” handle of health insurance cost. But with a 50 % percentage contribution you might be able to receive tax credits..
· Can my employees afford the co-payment, deductible, co-insurance and out-of pocket maximum and prescription deductible?
Co-Payment – Is the fixed amount that the insured has to pay each time he visits a doctor. Most popular co-payment is $ 30.- .
Deductible – The annual deductible is the amount that the insured is responsible for paying before the insurance company is paying for claims. HMO’s do often have no deductibles. PPO’s have deductibles and can be on very “rich plans” be as low as $ 500, and very affordable plans be as high as $5000.- . In general X-rays, lab work, MRI, hospital stay and out-patient surgery procedures are subject to deductibles.
Co-Insurance – Is the amount the insured is responsible for paying, once the deductible has been met until the out-of- pocket maximum is reached. For example, a PPO plan has a deductible of $ 1500. After the insured has paid the $ 1500 deductible, he is then responsible for a 20 % coinsurance until an out –of- pocket maximum of $ 5000 is reached. The insurance will pay the 80 % of the claims . Once a total of $ 5000 on medical expense has been paid in a year, the insurance carrier will pay 100% of the claims.
- Do I want to offer dental, vision, life, long-term-care, disability insurance and other supplemental insurance plans on voluntary basis, meaning employees can select these plans and the premium will be deducted before taxes of their wages?
- Do I set up a Cafeteria Plan ( Section 125 Plan) , which allows employee’s contribution towards health insurance and supplement plans be deducted before taxes. This will reduce your FICA and as a consequence also your workers compensation.
- Are there any special promotions by insurance carriers to reduce the RAF available ? Often for groups over 6 employees and a RAF lower than 1.05 , carriers offer promotions to entice switching to them by guaranteeing a RAF rate of 0.9 without underwriting!
- If HSA Plans (Health Savings Accounts) are offered, will the company contribute a specific US-$ amount per employee? ( See also HSA info )
We hope this guide has been helpful for you, but there are many more questions to answer and help needed to guide you through the enrollment process.
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