Your life as a Business Owner is full of challenges. So, you may struggle with finding the time to dive into the confusing world of health insurance for your business. We understand and want to help you find the right plan for your needs and budget. Here are five things to know when shopping for health insurance that will help you meet legal requirements, understand your options, and save you and your employees money.
1. Understand your Federal and State Legal Requirements
Take time to review your State’s Legal Requirements for Health Insurance. Your state should have clear guidelines on the requirements for a business of your size. You will want to know at what point you are legally required to provide a group plan for your employees so you can be prepared. Also, remember that while it may not be legally required to provide health insurance, not having a plan could cost you top-tier talent when hiring new team members.
2. Know the Basic Health Insurance Lingo
While an industry professional can help you understand your insurance plan, knowing the insurance terms ahead of time can help you make the right decisions. Below are just a few standard things to know.
The amount you pay for your health insurance every month.
The amount you pay for covered health care services before your insurance plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself.
A fixed amount ($20, for example) you pay for a covered healthcare service after you have paid your deductible.
- Let us say your health insurance plan’s allowable cost for a doctor’s office visit is $100. Your copayment for a doctor visit is $20.
- If your annual deductible applies to doctor’s visits, you must satisfy that first before your copayment applies.
- Copayments (sometimes called “copays”) can vary for different services within the same plan, like drugs, lab tests, and visits to specialists.
- Generally, plans with lower monthly premiums have higher copayments. Plans with higher monthly premiums usually have lower copayments.
Similar to Copayments, Coinsurance is the percentage of costs of a covered health care service you pay (20%, for example) after you have paid your deductible.
- Let us say your health insurance plan’s allowed amount for an office visit is $1000, and your coinsurance is 20%.
- If you have paid your deductible: You pay 20% of $1000, or $200. The insurance company pays the rest.
- If you have not met your deductible: You pay the full allowed amount, $1000.
You should also have a general understanding of Marketplace plans. While there are many plans available in the marketplace, here are the most common ones. Note that within these plans, there can be varying levels of coverage. Here are four examples:
Exclusive Provider Organization (EPO)
A managed care plan where services are covered only if you use doctors, specialists, or hospitals in the plan’s network (except in an emergency).
Point of Service (POS)
Another type of plan where you pay less if you use doctors, hospitals, and other healthcare providers that belong to the plan’s network. With this plan, you normally need to get a referral from your primary care doctor before seeing a specialist.
Health Maintenance Organization (HMO)
A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally will not cover out-of-network care except in an emergency. They generally only allow coverage in your state and often focus on integrated care, preventative measures, & wellness.
Preferred Provider Organization (PPO)
A type of health plan where you pay less if you use providers in the plan’s network. You can use doctors, hospitals, and providers outside of the network without a referral for an additional cost.
Also, know the difference between HSA vs. FSA:
Health Savings Account (HSA)
Health savings accounts are not typical savings accounts, and they are available only to people who have a High-Deductible Health Plan (HDHP). Every year the government determines the minimum deductible amount a plan can have to qualify as an HDHP, as well as the maximum amount an individual can contribute to an HSA.
Flexible Savings Account (FSA)
Flexible spending accounts come only as part of a benefits package from an employer — you can’t get one on your own — but the medical expenses you can use them for are the same as HSAs. The rule for the money is “use it or lose it,” meaning you lose any amount you have not spent at the end of the year unless your employer has selected a rollover option. The IRS determines the limit on the rollover.
Note: To search for more health insurance-related terms, we recommend visiting the extensive glossary at HealthCare.gov.
3. Know Whether You’re Going to Provide Dental or Vision
When it comes to offering Dental or Vision Coverage to your plan you may be on the fence. Is the price justifiable, or will your employees use it?
A significant advantage to providing these coverages is that employees who have been struggling on the job because of poor eyesight or dental health can take advantage of this benefit to correct any issues. This is likely to lead to more productive workers and a higher level of retention with employees.
Of course, if there is an additional cost, and your employees may decide not to add it. There is also the chance they opt for it, but do not use it. However, we have found that the additional cost of offering Dental or Vision coverage benefits can be overcome by adequately promoting the program to your team and helping them understand the value in this coverage.
4. Get a Gage on your Employees Health
Did you know that you can choose a plan that pays you back if your team’s total claims come in lower than anticipated? Or that some programs offer rewards for you and your employees when they practice healthy behaviors? If you know your staff is in generally good health and you have at least five employees in your organization, you may qualify for one of these programs. Usually, with plans like this, your team may be required to fill out a historical claims or medical questionnaire before approval. Be sure to ask your agent about these alternative insurance programs when getting your quote.
5. Learn Your Health Insurance Options
While we have covered a lot in this article, health insurance is a complex system that cannot be summed in just five main bullet points. We encourage you to not take on the difficult task of finding the right health insurance for your business alone. The insurance professionals at DRS Insurance Group will take the time to customize insurance options for your business, so you can be sure you and your team are covered at the right price. Our team can cover small businesses from 5-50, medium businesses 51-100, and beyond.