Group health insurance is anything but simple.
However, for most employers, a robust benefits package is essential for retaining great employees and attracting new talent to their business.
I meet with businesses every day who have the daunting task of keeping their group health insurance costs reasonable and simultaneously providing a package that meets their employees’ needs.
And often, it can be a challenge to create a group health program that does both.
When you look at your group health insurance program, does your insurance program align with your goals as the employer while considering your employee’s expectations and needs.
To help you assess your plan, I’ve put together this article explaining what you need to consider as you evaluate your group health insurance plan.
Depending on the number of your employees, you need to evaluate these four elements to arrive at a plan that can make everyone happy – or at least mostly satisfied.
These elements are:
- Deductibles
- Your Provider Network
- Preauthorizations and Restrictions on Care
- Prescription Medications
Before we jump into these elements, however, let’s take a minute to discuss limitations you may have as you design your group health insurance.
The amount you can customize your group health insurance plan is directly related to the number of employees in your business. In group health insurance, we call this your group size.
Group Size
Businesses fall into three categories when it comes to group size:
- Small Group – 1-50 employees
- Mid-sized Group – 51-99 employees
- Large Group – 100+ employees
Here’s what you can expect in terms of group health insurance customization for each of these group sizes.
Small Group
If you are a small group, you can not customize your benefits. Your options will be limited to the various plans offered by group health insurance companies for groups of your size.
Mid-sized Group
If you have between 51 and 99 employees, you have a few more choices when it comes to group health insurance.
You may have some customization of copays and coinsurance options. You may also have more options regarding deductible amounts. You may also be able to select the type of network you want to utilize. You could choose between a PPO, EPO, or a specialty network.
Large Group
If you are a large group, you can exercise a great deal of control over your group health insurance. As a large group you can customize like a mid-sized group and have even more customization options.
Depending on your group’s needs, you may want to be fully insured and pay for a pre-formulated group health plan. You can also fully customize your group health insurance by self-funding your group health insurance. Or, you may fall somewhere in the middle and semi-customize your plan.
4 Elements to Establish Group Health Insurance that Works for Your Team
Now let’s take a look at the specifics of your group health insurance that impact your bottom line as the employer as well as contribute to your employees’ satisfaction or dissatisfaction.
1. Deductibles
Every group health insurance program will have some control over the deductible amount your employees will have to pay for their medical appointments, procedures, and medications.
A significant concern for many employees is having a high medical insurance deductible. If the deductible is too high, your health insurance may not add much value to them.
Very high deductibles discourage employees from using their health care. Employees will often skip follow-up appointments, fail to fill needed prescriptions, not get needed care from a specialist, and not visit their doctor or clinic even if they have an urgent medical problem.
Higher deductibles can also lead to employees struggling to pay for their medical bills, leaving them with accumulated medical debt.
For very low-wage earners, a high deductible can prevent them from utilizing their health insurance at all.
The Importance of Healthy Workers
Healthy employees are essential for every business. Not attending to medical needs and preventative care can cause employees to miss work. Just getting routine exams and consistently taking prescribed medications can help your employees stay healthy and keep them present in the workplace.
However, when employees don’t get the health care they need they can end up with greater medical issues and in turn miss more time at work.
For example, when a diabetic employee stops taking their insulin because their insurance doesn’t cover it, they risk serious illness, diabetic coma, and a potential hospital stay.
Or, let’s say an employee has chronic back pain, If their deductible is so high that they can not afford to get the necessary procedures or tests prescribed by their doctor, they will often just live with the pain until it is unbearable.
They often injure themselves worse than if they had dealt with the pain earlier. Early intervention could have cost the employee a few days off of work, but now they are looking at months to recover.
And when an employee needs to miss work for an extended time, the employer often has to absorb additional costs to train a temporary replacement or costs associated with reduced productivity.
A high employee deductible sometimes costs the employer in the long term.
| Very high deductibles can discourage employees from using their group health insurance, leading to injury, worsened medical conditions, and absenteeism. |
2. Network
Every business is different, and the needs of their employees are different as well. Some businesses benefit by providing their employees with an extensive network of providers. However, others benefit by limiting the size of their network.
If you are enrolling in a fully-funded insurance program, the insurance company will have various network options for your selection. If you are a self-funded program, you have complete control over the network of providers your employees need to use.
Either way, the size and location of your employees often impact the best choice of network for your company.
An Extensive Network
Many employers can go without using an extensive network for their employees.
An extensive network is more important if you have employees that live in multiple states. You may also need an extensive network if your employees need access to specialists that would not be available in a more localized network.
A Limited Network
Group health insurance plans that require members to stay within a smaller network of providers usually cost less than one with an extensive network of providers.
You may find that your employees typically utilize the doctors in a smaller network. They don’t have the need to use doctors and facilities in a larger network.
Many employees would prefer to pay less for their group health insurance and use a smaller network. For a small or mid-sized group, enrolling in a plan with a smaller network can be a successful strategy for lowering group health insurance costs.
Surveying your employees about which providers they generally use can help you determine which network would best meet your employees’ needs.
| As the employer, a limited network of providers can be an excellent way to decrease the cost of your group health insurance plan. If, however, you have employees who live in multiple states or would benefit from a large network of specialists, you may decide it is more important to provide them with an extensive network. |
3. Preauthorization and Restrictions on Care
Something that most employees hate dealing with is preauthorizations for procedures and tests. They see it as an unnecessary hoop to jump through to get the care they need.
At the same time, insurance companies have found that preauthorizations have a significant influence on employee behavior. Often preauthorizations slow employees down from getting procedures they don’t really need.
Here’s an example. Let’s say you have an employee that falls down their stairs at home and did something to their arm. It would be best for that employee to start their medical intervention with an x-ray than a more expensive MRI.
And because most falls don’t result in extensive breaks, the advanced imaging an MRI would provide would not be medically necessary.
The insurance company will only preauthorize an MRI after less expensive options have been utilized. At this point, it becomes necessary to use this more expensive diagnostic procedure to determine a course of care for your employee.
While it can be a hassle, preauthorization often reduces costs by using less expensive procedures to diagnose and treat your employees’ medical needs.
Restrictions on Care
Much like preauthorizations, insurance companies often have restrictions on the types of care your employee can receive.
For instance, your insurance company may restrict the number of physical therapy or chiropractic visits your employee can schedule each year.
The insurance company may also require your employee to try less expensive therapies, prescription medication, and procedures before they qualify for a more expensive treatment.
For instance, if you have chronic hip pain, your insurance company may require you to start with physical therapy before you can pursue any kind of surgical solution.
Employer’s Options Regarding Preauthorization
As an employer, you can not customize your group health insurance’s preauthorization requirements. The insurance company has already predetermined its preauthorization policy.
However, some insurance companies have more stringent policies regarding preauthorization. By looking at various companies, you can choose an insurance company that has a plan that aligns with your desires when it comes to preauthorizations.
Your benefits advisor should have insight into which companies align with your desires for your employees.
| Every health insurance company has different policies when it comes to preauthorizations and restrictions on care. Your Employee Benefits Broker has in depth knowledge about various insurance companies and can pair you with the best fit for your business and employees. |
4. Prescription medications
Your prescription medication plan is the final element you need to consider when creating your group health insurance package.
With nearly 66% of the adult population taking prescription drugs, this part of your group health insurance plan is very important!
Some group health insurance programs do not cover prescription medication.
Some group health insurance programs limit which prescription medications they will cover. Sometimes brand-name drugs are not covered.
Sometimes employees are not able to get the medication that best works for them.
Group health insurance companies have a predetermined list of drugs that are approved for reimbursement. As an employer, your only choice is which predetermined plan you want for your group health plan.
Choosing the Prescription Drug Plan That’s Best for Your Employees
If you are a small or mid-sized company, you do not have a great deal of choice when it comes to your prescription drug plan.
However, as a large employer, you can look closely at your employees’ prescription drug claims to assess what drugs they are using. With the help of your employee benefits advisor, you can dive into what is actually driving your prescription medication costs.
After assessing, you may find that you are paying for the top-of-the-line drug plan designed for employees with regular prescription drug needs. At the same time, your employees are only using amoxicillin every now and then. You are overpaying for your drug plan!
You might also find that your current prescription drug plan is too restrictive for your employees. If you have employees with diabetes or an autoimmune disease, a restrictive plan may not help them cover some of their highest medical costs.
| Your employees’ prescription medication needs must be considered when choosing a group health plan. Knowing what medications are commonly used can direct you to a plan that meets your employees’ needs. It can also keep you from overpaying for a plan with more options than your employees need. |
How can I create a plan that keeps my employees happy and my costs as low as possible? What should I do next?
Group health insurance is just one ingredient to keeping employees happy at your company. But it’s a significant ingredient!
“56 percent of U.S. adults with employer-sponsored health benefits said that whether or not they like their health coverage is a key factor in deciding to stay at their current job.”
Meeting with your employee benefits to thoroughly evaluate your employees’ needs is a great place to start when it comes to creating a plan designed for retention.
One way to evaluate those needs is through surveying your employees about what is most important to them.
Because the data you receive regarding your employees’ health is often limited, creating an anonymous survey that they can voluntarily fill out is the best way to understand your employees’ needs.
In your survey,
- You will want to inquire about the facilities and doctors they most frequently use.
- You may also want to ask questions about their prescription medications to see how well your current drug plan is working for your team.
- You will want to ask questions that help you assess how frequently your employees are using their health care.
A short survey is an ideal way to show your employees that you care about their medical needs and that you value their input. It allows you to align your group health insurance plan with your employees’ actual needs.
Your Employee Benefits Advisor should help you create an effective survey to help you determine what you need from a group health insurance plan.
Working with an Expert to Help You Control Your Group Health Costs
At Baily Insurance Agency, we have a unique approach when it comes to group health insurance solutions. More than just going “to market” each year and pricing out various health plans, we see group health as a year-round commitment.
We do more than ask insurance companies to provide a quote, sit back, and hope for an acceptable quote. Our team proactively works with our clients to establish their long-term group health insurance goals and then set to work to accomplish those goals.
If you are looking for a team to help you with your benefits program, our team would love to explore that option with you.
We recognize that our approach may not be the right fit for every company. Because of this, we like to determine our fit at the outset. By scheduling a 15-minute introductory meeting with our team, we can quickly assess if working together would be a good match.
Let me know if you’d like me to set some time aside on my calendar. I’m looking forward to connecting!
