How to Choose a Health Care Plan

Choosing a health care plan is not an easy task. To make sure you’re headed in the right direction, talk to your employees. Some employers send out surveys to their employees to get more insight on what they want included in the company’s health care plan.

Suzanne Boyle, health and welfare product manager with Insperity, a Texas-based professional employer organization, says that small business owners often get bogged down by all the complex details of each plan.“

Very generally speaking, the main considerations to worry about boil down to three things: the plan’s benefits, costs, and choices,” says Boyle.

Here’s some information that may help you identify your company’s and employees’ medical insurance wants and needs.

Health Care Costs

  • Establish a budget.
Boyle advises that before you start shopping, you need to determine how much money you’re willing and able to spend on your health care plan. But you’re not the only one with a budget. Employees aren’t going to opt in to a medical plan that cuts far into their take-home pay. Knowing how much you’re going to pay and how much your employees are willing to pay will help you set a baseline cost. This can quickly narrow down your choices.

A strict or limited budget may mean sacrificing some benefits. The more that’s covered, the more the plan will cost. As you talk to your employees, make them aware of this so they’re not shocked by the limitations of the plan you choose.

  • Consider monthly premiums and out-of-pocket co-pays and deductibles. 
As a standard rule of thumb, plans with lower monthly premiums will have higher deductibles. Employees who don’t go to see the doctor much probably won’t mind paying a higher deductible in exchange for lower monthly premiums, whereas workers who tend to have more health problems might prefer lower deductibles.

With most managed care plans, employees are responsible for some out-of-pocket costs when it comes to seeing a doctor and paying for prescriptions. Low co-pays and prescription costs usually result in higher premiums.

Health Plan Benefits and Choices

Before you choose a health care plan, you should be sure that the plan’s benefits include the services that are most important to you and your employees.

The age, gender and existing health of your employees play a big role when deciding what health care plan will best serve them. If your staff is mostly made up of young, healthy adults who only see the doctor when they’re sick, their need for health insurance may be low. In this circumstance, a health savings account may be acceptable or you may be able to forgo coverage all together. But if your staff is made up of middle-aged workers or women of childbearing age, they will likely visit doctors or specialists on a more regular basis and will want a more standard health insurance plan.

  • PPOs vs HMOs

 

With a Preferred Provider Organization (PPO), employees who choose an in-network doctor will be charged the normal fees and deductibles that are associated with the plan. Under a PPO, if they choose an out-of-network doctor, they can expect to pay a little more, but will not have to pay the entire bill.

With a Health Maintenance Organization (HMO), employees will only receive coverage if they see a doctor who is part of the HMO network. When receiving care from a physician outside the HMO, the employee is responsible for paying for all medical services received.

Also, if your company requires employees to travel frequently, you may want to consider a health care plan provider that has not only local providers, but also a good range of in-network providers throughout the country.

Boyle says that most employees will appreciate having multiple options. But she warns that this will probably result in higher costs.

“Some providers allow small businesses to offer their employees a choice among multiple benefit packages,” says Boyle. “Under such an arrangement, some employees might choose a high-deductible PPO product, others a low-deductible PPO, and still others an HMO.”

Choosing a health care plan is complex, but talking to your employees and finding out what’s important to them can help you identify and prioritize plan benefits, manage costs and select the best health care plan for your company and your employees.