Add a Health Plan

With all other aspects equal, many employees tend to select an employer based in part on the benefits it provides. Yet, many smaller shops rarely have the funds to offer comprehensive health coverage. Fortunately, according to JoAnn Laing, president and CEO of Ridgefield, N.J.-based Information Strategies Inc., seeing that employees really want healthcare coverage in some form, many would even accept a catastrophic insurance policy, if nothing better were available. In most cases, limited coverage is all people need considering that 73 percent of Americans spend $500 or less each year on medical expenses outside of healthcare insurance.

“Simply having health care insurance is an excellent morale booster and shows the employee base that the company truly cares. Health care also binds employees more firmly to the company,” Laing says. “Plus, studies show employees become more productive after healthcare insurance is added.”

Get Started
Although brokers and agents can provide valuable guidance throughout the various stages of plan establishment, there are a few steps that businesses should take before initiating these discussions. For instance, it is important that businesses have a firm grasp on what level of budget is available to pay for healthcare insurance, and it is important to know how much employees are willing to pay. These are financial guidelines that can help determine what plans are most appropriate.

After contacting an agent, companies must be prepared to decide what type of coverage best suits their needs. Some of the most common options include traditional managed care HMO, PPO or POS systems or consumer directed health savings accounts (HSA), health reimbursement accounts (HRA) or flexible spending accounts (FSA). “Our studies show that small firms are moving towards HSAs at record pace,” Laing says. “We expect that 25 percent will offer HSAs in 2007.”

As a company begins moving forward, it is very important that they take a few steps designed to actively engage the employee base. For example, companies must have an education/communication plan to inform employees and show how the new healthcare plan is a real benefit. It also behooves an organization to create and encourage employees to be active in wellness and other programs that improve their overall health and that of their families to help prevent exorbitant premium costs in the future.

Legislative Front
For businesses that decide that they do not want to deal with the issues surrounding healthcare insurance, the issue may soon be decided on the national front through the legislature. “It is just a matter of time until there are national measures in place,” Laing says. “The U.S. Senate is already considering a bill to permit small firms to join associations to offer healthcare insurance.”

Plus, some state legislatures already have taken the first step in forcing larger employers to provide healthcare insurance to all employees including part-time associates.  In addition, California has a requirement for companies with more than 50 employees to provide healthcare.

One area where experts anticipate legislation will make an imminent difference deals with HSA. The healthcare insurance carriers are supporting this move to transform their members into more accountable consumers of healthcare, offering a wide range of plans that reduce premium cost by ensuring that catastrophic coverage is included, but that affords the consumer, the member, and the patient even more control over the management of their own healthcare, explains Joe Torella, vice president of Hamilton, N.J. –based Savoy Associates. “In the short term, this control will be largely over the traditionally lower out-of-pocket expenses; longer term, these same carriers are availing their members (consumers) the internet-based tools that will enable them to make more informed decisions on their healthcare—those decisions will include eligible pharmaceutical, physician and hospital expenses, and will consider not only price, but quality,” he says.

Torella adds that this is different than the traditional solution of cost shifting because with the patient actively involved in the decision, medical costs are expected to go down over time, services are expected to be delivered in a more qualitative way and the suppression of premiums will help push down medical trends which have continued on a double digit pace over the past several years.