It’s the most not-wonderful time of the year: health benefits renewal season. The dreaded rate increases start showing up in your inboxes and you have to start moving your budget around to accommodate for resources you had hoped could go somewhere else.
This challenging season can cause organization leaders to ask themselves, “how can I find better group health benefits?”
1. Define What is “Better”
Oftentimes, health insurance plans are judged by their copay. I’ll admit, before I really understood how health insurance worked, that was the first thing I looked at walking into an annual HR-required open enrollment meeting at work.
Sure, the copay can bring a level of convenience and perhaps even comfort for someone who is unfamiliar with their health benefits plan. But there are actually a lot more important things under the hood than a copay.
The most important factor of all is the out of pocket limit — which is often referred to as the “worst year” a family could experience, as far as medical expenses go. This is the amount that both the organization and the family must plan for. Why? Because two of every three personal bankruptcies in the United States are due to medical expenses. Believe it or not, the majority of those people actually had health insurance.
“Better” is not about the copay. And it’s also not about the metal color (i.e. a gold, bronze, silver, or even platinum plan. Those only have to do with coinsurance percentages, and not the actual risk.). If you want to find a better plan for your team, then you need to lower the bottom line as best as you can.
Pro Tip: If you aren’t sure the difference between deductible, out of pocket limit, copay, or coinsurance, don’t worry. You’re not alone! The copay can be thought of as an access fee paid up front. If you don’t have one, they’ll just bill you later. The coinsurance is the percentage of what you pay on a bill after meeting the deductible. Then once you hit your out of pocket limit, you no longer pay a copay or coinsurance.
2. Explore the Full Spectrum
Now that we have defined what “better” is when it comes to the basics of health insurance, it’s important to understand that there are many ways to make a plan better. For example, as we mentioned, just because something has a copay doesn’t necessarily make it better. So what are some ways a plan can be made better?
One thing you can do is ditch the copays altogether and move your team over to HDHPs. By doing so, your team can utilize savings from lower monthly premiums and add those to an employer HSA contribution. The result is often a lower net-exposure to the employee.
Another strategy for finding better group health benefits is including an Health Reimbursement Arrangement (HRA) with a base plan. HRAs can pay for medical bills once certain criteria are met by the employee. For example, your employee may pay the first $1,000 incurred, but then you will cover the rest of their bills after that. The key is that bills are only paid as incurred. Meaning you only spend on what is needed. There are several ways to use HRAs, and designing them correctly is imperative to ensuring a better group health benefit.
Managed individual models are the premiere solution for providing better group health benefits. Whether using Individual Coverage HRAs (ICHRA) or Remodel Health’s exclusive WageUp™, these two strategies focus on individualizing the approach and creating an employee-centric solution. ICHRA works especially well for for-profit business, and WageUp™ has a proven track record for helping nonprofits.
In general, better group health benefits have lower out of pocket limits, but also meet the needs of individuals. If you’re cramming everyone into the one-size-doesn’t-fit-all approach, then you’re missing the mark. Not only can you lower their bottom line on exposure, but you can also make sure they have access to advanced premium tax credits, spouse’s plans, term plans, sharing ministries, and more. This is better!
3. Diversify Your Investment
This leads us to the final step in finding better group health benefits: diversification. Very similar to investment strategies, diversification is an important principle in group health benefits. In today’s landscape, health benefits are starting to look more like a 401(k) rather than an outdated pension.
Individual people need individual products because they have individual needs. This is what can actually make the biggest impact on the bottom line for the organization. There are lots of moving parts when it comes to diversifying your group health benefits based on individual needs, which is why it takes a sophisticated software to fully analyze all the details so you don’t miss anything — from doctors to Rx to special programs and more.
Finding better group health benefits without the painful annual rate increases is possible! Remember, the more expensive plan does not always mean it’s better—especially if it involves copays. Second, always explore your full spectrum of options if you want to impact the bottom line—whether it’s using HSAs, HRAs, or managed individual models.
Ready to find better health benefits for your team?
Navigating the healthcare industry as an employer is difficult and complex. But you don’t have to do it alone! Finding better group health benefits is closer than you may think. By simply exploring your options, you can start growing with the changing times.
This is what the team at Remodel Health is all about. Our expert team of health benefits consultants can provide you with a full, free evaluation of all your options and show you how you can finally offer better group health benefits to your team.
Email us today at [email protected] for a demo and a quote to see what’s better for you!
Important Notice: Remodel Health does not intend to provide specific insurance, legal, or tax advice. Remodel Health always recommends to consult with your own professional representation to properly evaluate the information presented and its appropriate application to your particular situation.