When choosing a group health benefits plan, you want to take into account the following things:
- How much will it cost you and your employees?
- What will be included?
- How many different vendors will there be?
- What administrative (fiduciary, plan document, audit, tax) filing responsibilities will be required (and should you be outsourcing benefits administration)?
When it comes to offering health insurance to employees, you want to consider which carriers are available in your area, what plans are offered and how much, if any, you’ll contribute to the coverage of your employees’ spousal or domestic partners and dependents.
As you consider group health benefits, you may learn much of the cost falls on the employer. However, just because you’re contributing to the cost of employee healthcare doesn’t mean you should choose group health insurance plans based on economics alone. While you do want to choose a plan that fits your budget and matches your goals, you also want a well-rounded plan that gives employees options and flexibility.
In 2017, the shares employers paid of medical care premium costs for private industry workers were 80% for single coverage and 68% for family coverage (DOL).
HMO vs. PPO
There are several different options when it comes to selecting employee health insurance. If you opt for a Health Maintenance Organization (HMO), the costs will be cheaper but your employees won’t have as many doctor choices in the network. If you choose a Preferred Provider Organization (PPO), employees will have more flexibility to choose their own doctors. Employees tend to prefer this choice because it prevents many out-of-network costs and in some cases, allows employees to keep the doctors they already trust.
No matter which type of group medical insurance you choose, you want to pay attention to what’s covered. Look for employee insurance plans that cover some or all of the following:
- Annual physical exam
- Prescription drugs
- Cancer screenings (mammography, colonoscopy, pap smear)
- Lab tests
- Blood pressure and blood cholesterol monitoring
- Electrocardiogram and x-rays
- Recommended immunizations
- Mental health and substance-use disorder services
- Emergency room visits
Much like any other type of insurance, the premium (in this case, paid partially by you and partially by the employee) varies based whether you choose a low or high-deductible plan. The latter obviously costs less per pay period, but when your employees go to use the benefit, it will cost them more for medical services. Low-deductible plans cost employees more per pay period, but cover more medical costs.
Voluntary benefits can include dental, vision, life, disability, critical illness (such as cancer) and accident insurances, as well as things like legal services and entertainment discounts. Offering voluntary benefits gives employees more options at group rates, with no cost to the employer.
FrankCrum provides voluntary benefits in conjunction with the full range of employer-sponsored benefit plans, all through one relationship. This empowers employers to offer many benefits without any of the time consuming tasks to secure and administer them.
Managing Benefits and Vendors
One of the most challenging aspects of offering a comprehensive benefits program is the administration work. Without the help of dedicated benefits specialists or a PEO like FrankCrum, managing benefit plans and multiple vendors can be very time-consuming. Even though activities peak during plan selection and open enrollment, you still must dedicate resources to new hires and ongoing employee questions and needs. Reconciling bills, paying carriers, bill escalations, claims and service issues, processing employee enrollment, and handling change and termination requests with the carrier are all important responsibilities within any comprehensive benefits program. You also have to handle eligibility notifications for adding newly hired employees and COBRA administration for terminated employees. This presents an important decision point between doing things yourself and partnering with a PEO like FrankCrum to handle it all for you.