What You Need to Ask Before Purchasing a Group Health Benefit Plan

If you’re like a lot of employers, your group health benefit plan is up for renewal in the fall. Have you considered what you might do if the increase in premiums is more than you can afford?
 
It never hurts to shop around. Just make sure you’re not focusing only on price. An inexpensive plan might cost you and your employees more in the long run. Here are a few questions you should ask your broker about your plan options.

Q. What benefits does this plan provide?
A. There are many different types of plans, ranging from a Preferred Provider Organization (PPO), which requires members to use certain providers; to a qualified high-deductible health plan with a savings option (like a Health Savings Account). To determine which plan is best for your organization, ask to see the Summary of Benefits and Coverage (SBC). This document lists the medical services and supplies a health insurance plan covers, as well as the associated costs, including information about medication costs, copayments and deductibles.
 
Q. What is the deductible?
A. A deductible is how much a member must pay in claims before the insurance company pays anything and before coinsurance goes into effect. This does not include the cost of premiums. So, if your plan has a $1,200 deductible, then you must pay the first $1,200 in covered medical bills before insurance kicks in.
 
Q. Which doctors and hospitals are in the plan?
A. If you’re interested in allowing your employees to keep their same providers, check to see if the plan includes their current providers. PPOs usually can provide a list of providers that are in their plan.
 
However, if you want more freedom than that, consider purchasing a plan that eliminates the restrictive PPO network requirements and penalties. The purpose of a PPO is to provide you with a
pre-negotiated discount for your medical services when you see a provider in the network. Fortunately, there are new alternatives to PPOs. With reference-based pricing plans, providers are paid the going rate for the area or a rate based on a percentage above Medicare allowable reimbursement. For instance, Allied National’s Funding Advantage Freedom plan members can see any provider (no network, no penalties). Instead of a PPO contract, providers are paid a Medicare “plus” reimbursement that is accepted by almost all providers.  
 
Q. How much of my employees’ benefits should I pay?
A. According to the Kaiser Family Foundation, small employers with fewer than 200 employees usually cover 82% of employees’ costs. The advantages of paying the majority of employees’ health plan costs is that it’s an easy way to increase participation in the plan. Having more and healthier employees helps “spread the risk” of your health plan costs across more people and can lower overall costs.
 
Q. What do I do if I don’t have a broker or want to explore other options?
A. Check with similar businesses and ask for recommendations. You also can go online to find free quotes. Allied National has more than 50 years’ experience working with small groups. Just fill out a few questions and we can show you some outstanding plans. If the plans are not a fit, we’ll be glad to show you plans from other carriers. Visit www.alliednational.com/allieddirect.

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Allied National

Founded in 1970, Allied National is one of the nation's oldest and most experienced third-party administrators. We're the small group benefit experts working to provide unique and affordable group health benefits to small business employers.