4 Tips for Easier Healthcare Shopping

Written by: Kristy Kwan, Benefits and Retirement Plan Administrator
 

There’s been a lot of speculation recently about the impending healthcare reform bill. Early discussions in the legislature mention a potential government-run health insurance plan, more rights for consumers when dealing with insurers, and a “pay or play” provision requiring employers to provide coverage for their workers or subsidize a system that will. Despite all the noise, it’s crucial to remember that nothing has been solidified as of yet – even the exact number of uninsured is open to debate.

In the meantime, you can prepare for the consequences of this reform by understanding what drives healthcare costs, how to keep those down, and how to insure your employees in the most cost-efficient and effective way possible. When the ink is dry on this new legislation, you’ll be ready to make an informed decision.

Shopping for healthcare is easier if you understand a few key points:

1. Carrier rates are based on a set rating system, and the standard rate is 1.00. These would be your standard rates. Carriers can then legally rate your group up or down by no more than 10% (0.90 – 1.10). This means that no matter what broker you choose to work with, the rates you are quoted will be exactly the same (one broker may quote you based on the 0.90 rates, versus another that may quote you based on the 1.10 rates, but the carrier’s underwriting department determines what rating level your group will actually receive).
2. Your group’s demographics (age, general health, zip code) will help determine the rates. Encouraging healthy lifestyles or employee exercise programs will help your group’s rates in the long run.
3. Certain benefits have a huge impact on healthcare premiums. One of the most over-used benefits is prescription drugs. A plan that offers comprehensive drug coverage will be more costly than a plan that offers “generic only” coverage, or requires a drug deductible to be met before benefits are paid out.
4. Offering multiple plan options, if possible, will help your employees pick the plan that works best for them while keeping your contribution to a minimum (you can contribute to the plan that meets the minimum government requirements, and the employees can “buy up” to the other options).

Healthcare is expensive, and the current system is complicated. However, offering your employees healthcare benefits does boost workplace morale and can be considered part of their total compensation package. We hope that you find our key points helpful, and we are prepared to react quickly and decisively to assist our clients with the eventual healthcare reform. If you’d like to discuss your options, please do not hesitate to contact MMC, Inc at (800) 899-6624.

Go back to MMC September 09 HR E-Newsletter

MMC HR E-Newsletter Archive

MMC Human Resources Tips