MELVILLE, N.Y. — Choosing a health plan for your employees can be daunting.
You’re constantly trying to balance your ability to offer competitive coverage with ever-rising health care costs.
With so many options and limited funds, how do you choose the right plan?
You can start by getting a handle on your employees’ needs, experts say.
“I think the place that companies get hurt the most is in not taking the time to really figure out what’s right for their company,” says Josh Senders, a partner with Pilot Employee Benefits, a Melville benefits consulting firm.
Conduct a survey of your employees, he suggests, and figure out what’s important to them.
You may discover that the majority aren’t wed to any one doctor, he says, or that most of their doctors belong to the same network. In that case an HMO — health maintenance organization — might make sense, because patients are generally required to go to a health care provider or hospital within the plan’s network.
If you’re looking for more flexibility, consider a PPO (preferred provider organization) or POS (point of service) plan. Patients typically can go out of network, but would likely pay a higher deductible or co-payment to do so.
Just remember that, when picking a plan, assess all the costs, including deductibles and co-insurance. The plan must not only be affordable to you as a business owner but also to your employees, who likely will be contributing toward their health care.
“It’s very rare for an employer to pay 100 percent,” says Mickey Lyons, past president and current legislative head of the New York State Association of Health Underwriters in Manhattan. Typically, he says, an employer will pick up from 50 percent to 80 percent of the costs.
And one plan may not suit the needs of all employees, so consider offering more than one, he adds.
If you’re confused about all the options, consider consulting with an insurance broker, which typically does not involve a fee for a small business and can help take the burden off your shoulders.
If you decide to go it alone, make sure the insurer you choose is legitimate and will be around long enough to pay claims.
Give yourself enough time to explore your options, advises Robert Nuzzi, managing director of Cook, Hall &Hyde Inc., an insurance and risk management firm in Melville.
“Look at all the plans, even the nontraditional ones,” he says.
For instance, Nuzzi says, carriers are starting to offer better pricing on alternative products such as health savings accounts. They require coverage by a high deductible plan, but allow you to set aside pretax dollars you can draw from as needed for qualified medical expenses. You can roll over unused funds year to year.
Such a plan isn’t in widespread use everywhere yet, but a company in Seaford says it’s worth exploring.
“You have to look at all options for the company’s sake and the employees’ sake,” says Bill Powell, owner of Universe Appliance, Gas, Heating &Central Air Conditioning, who spends more than $225,000 on health care annually for 38 employees. The company, which uses The Alcott Group, offers more than half a dozen plans, picking up 75 percent to 98 percent of the costs.
“I don’t think employees always fully understand the burden of health care,” says Jeff Krantz, chief executive of Harry Krantz Co., an Edgewood electronic components distributor that works with Pilot Employee Benefits. That’s why it helps if you can get employees involved in the process, he says.
And don’t be afraid to get your own hands dirty, Krantz adds. “You need to really actively engage in the process and critically look at everything,” he notes.
After all, nobody is better at watching your back than you are.
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