If you own or manage a business, your investment in employee group insurance can help you retain top performers and attract new talent. However, simply providing a benefits package is not enough. In order to maximize the value of employee benefits, management must understand the components of the plan and create effective policies to find the right insurance fit, encourage employee participation, manage costs and comply with regulations. In this article, we’ll take a closer look at the steps any business can follow to get the most value from a group insurance plan.
Step 1: Find the Right Insurance Fit
Whether you start with an online search or with a plan recommended by your insurance advisor, the first step to maximizing the value of employee benefits is selecting the right plan for your employees and your organization. Compare the benefits packages offered by different insurance providers. Make this choice just as you would any other business decision, based on features, benefits and costs, with your focus on the right fit for your business.
What types of coverage are offered?
The primary objective of an employee benefits package is health coverage, specifically medical coverage for regular checkups and for any necessary doctor visits or other medical expenses. Benefit packages may also add dental benefits, as well as coverage for pharmacy costs, vision care and additional benefits. The value of your employee benefits package will be enhanced by the scope of coverage.
What are the deductibles and copays?
Life stages and the probability of needing care will also influence employee views of higher deductibles and copays versus lower premiums. Many employees prefer modest deductibles and copays if this reduces the amount coming out of their paycheck. However, when deductibles are too high, workers may question the value of the plan as an employee benefit.
What are the out-of-pocket maximums?
Help employees understand how to work with individual and family out-of-pocket maximums. A worker with time left on the plan year who is nearing the maximum may wish to schedule an exam, testing or an elective procedure they have been delaying. This may be the time to order extra medications or medical supplies. Ask your insurance agent to confirm whether these strategies are feasible under the plan.
Step 2: Encourage Employee Participation
Once you have selected an employee group insurance plan, the next step is creating a program to encourage employee participation. Your tasks are to understand what motivates your potential enrollees, communicate the value of participation, help employees understand the coverage, make it easy to enroll and enlist the help of your insurance advisor.
Help Employees Understand the Coverage
Experienced managers may understand terms like copay, in-network or out-of-pocket maximum. Enrollees may not. Host a group insurance lunch-and-learn meeting to define coverage terms and answer questions. If the questions aren’t flowing, use a prepared list of FAQs to stimulate discussion. Include examples (real or theoretical) of how employee group insurance has covered expenses for an illness or injury, being careful to respect employee privacy. A personal testimonial from the group leader can be especially powerful.
Make it Easy to Enroll
Don’t let group managers surprise employees with a big folder that has to be absorbed and acted on by Friday. Listen when employees talk about perceived affordability and be ready to give counsel with the voice of experience. Set up examples of monthly costs for individual or family coverage based on enrollment in the HMO or PPO versions of the plan.
Provide a handbook or online portal. Prepare relevant examples of copay, deductible and out-of-pocket maximum for common scenarios, such as a workplace injury or a healthy baby delivery. The more questions you can either clear up in advance or answer with a prepared example, the easier it will be for your employees to find their way to enrollment.
Enlist Your Insurance Advisor
Insurance advisors have plenty of experience in all of the foregoing enrollment challenges. They can help you determine which employees will be relatively easy to enroll, and which ones may need a bit more presentation and salesmanship.
An insurance agent can quickly break down the differences between plan options and will respond to questions with concise answers and reassuring examples. Your agent can also visit to help you prepare for enrollment with a plan presentation or follow up with a question-and-answer session.
Step 3: Manage the Costs
As a business owner or manager, you know how to manage costs: shop for the best provider value, negotiate the best deal with your insurer and provide cost-effective options for enrollees. The job of managing group insurance costs is really never done, and management can continue to hold down costs by promoting workplace safety, encouraging responsible preventive care and sponsoring employee wellness initiatives.
Negotiate Rates with Insurers
The job of managing cost begins when you choose the insurance company that will underwrite the plan. Learn how you can qualify to save money on initial discounts or future savings. Shop as you would for any other service, allowing potential insurers to compete for the best value. Value, in this context, does not mean the lowest price, but the best combination of coverage, service and premium cost.
Offer a High-Deductible Health Plan (HDHP)
A high-deductible health plan (HDHP) is often combined with contributions to a Health Reimbursement Account (HRA) or a Health Savings Account (HSA). Workers who may not need many health care services can save substantially on the lower monthly premiums of the HDHP while contributing to their HSA. If there is a claim with the high deductible specified in the HDHP, the employee can pay the deductible with funds from the HRA or HSA.
Encourage Preventive Care
Treatment is always more expensive than prevention. There is no better example of this than the recent pandemic. For most people, inoculation with the Covid 19 vaccine was available at no cost, while many active cases required very costly treatment including hospitalization. Encourage employees to use the health care plan to schedule regular physical exams, flu shots, skin checks, cholesterol screening, blood pressure testing, mammogram, colonoscopy and testing for sexually transmitted disease.
Promote Employee Wellness
Many chronic illnesses can benefit from behavior modification. Employers have no better opportunity to control health care costs than by providing incentives through company sponsorship of group wellness programs. Eventual treatment costs can be avoided or delayed with programs for weight loss, smoking cessation, cooking classes, alcohol and drug counseling, gym memberships, yoga classes and more.
Step 4: Comply with Regulations
Maximizing the value of employee benefits means staying out of regulatory issues, which can bring legal problems, fines or penalties. Staying up to date with the ever-changing regulatory environment is important for employers. This includes your state regulations, as well as the Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act (HIPAA) and the Consolidated Omnibus Budget Reconciliation Act (COBRA), among others.
Here are a few points to keep in mind:
- Understand ACA Employer Mandates. The ACA includes an employer mandate, which requires businesses with 50 or more full-time employees to provide health insurance or face penalties. The law also mandates certain coverage requirements for all health insurance plans. Make sure your plan complies with all ACA regulations.
- Understand HIPAA Regulations. HIPAA includes requirements for employee privacy protection, which means protecting personal health information. Make sure that all employees understand their rights to privacy and that all vendors and partners handling personal health information comply with the law.
- Understand COBRA, which requires employers with 20 or more employees to offer continuation of group health insurance coverage to employees and their dependents in certain circumstances, such as a reduction in hours or termination of employment. Make sure you understand your obligations and follow the rules to avoid legal exposure.
Four Strategies to Maximize Value
Any business owner or manager can employ these four strategies to maximize your employee benefits: find the right insurance fit, encourage employee participation, manage the costs and comply with regulations. The more attention you can give to these strategies the better prepared you will be to create and manage effective employee group insurance policies.