Commentary: According to the 2014 Employer Health Benefits Survey, conducted annually by the Kaiser Family Foundation, employer-sponsored health insurance premiums increased 69% over the past 10 years, yet premiums have increased less quickly over the past five years (2009-2014) than the preceding five-year period (2004-2009). In fact, premiums only increased 3% from 2013 to 2014 – but why?
Many factors are at work, but certainly the increased focus on rising health care costs and the passage of the Affordable Care Act renewed interest from health plans and other health care organizations to offer new and innovative plan offerings, such as narrow network products, the creation of the Consumer Operated and Oriented Plan program and provider-owned health plans and the new sales channels for health insurance – including public and private exchanges.
When employers are searching for new coverage options – whether on their own or with the help of a broker – they will encounter some big name insurance companies, familiar hospital/provider systems and new insurance companies all offering coverage options. How does one sort out who’s who?
Provider-owned organizations account for a number of new entrants to the health insurance market. These health care providers turned accountable care organizations offer a unique value proposition for consumers. As provider-owned health plans, an employee will have access to the main hospital(s) in the system and the doctors who are affiliated with these hospitals. They promise closer coordination, shared patient records and a trusted brand the consumers know within the community. On the other hand, because they are new insurance companies, employers and employees need to be aware that they may be starting or scaling up their insurance and administrative infrastructure. Enrollment, billing and claims systems and customer service systems may take some time to work out the kinks.
See also: State exchanges look ahead to 2015
Existing health plans
Some health plans decided not to expand their coverage options available until the 2014 insurance market reforms took effect. But after witnessing the robust enrollment, these companies are offering new insurance plans through the exchange and a host of options off-exchange as well.
Consumer-Oriented and Operated Plans, or CO-Ops, were created through start-up loans made available by the ACA to give employers and consumers more non-profit options in the health insurance market. CO-OPs are member-governed and have a non-profit mission, so they must use profits to either lower premiums or improve benefits. CO-OPs are also new entrants to the marketplace and are eager to count employer groups as part of their membership, offering innovative approaches to care coordination, wellness and customer service. Many employers and their employers may find them to be an attractive coverage option. As with any health plan, be sure to check the formulary and provider network to ensure any regular medications and visits to your physicians are covered.
More competition among the players forces them to distinguish themselves through discounted pricing, or offering products with additional benefits preferred by consumers.
Having more options can make it harder for an employer to choose the best plan for the needs of their employers. An employer should not just look at the cost of premiums and choose the cheapest plan. Employers need to take the time to research various health plans’ websites to have a deeper understanding of their offerings and options or enlist the help of a licensed insurance broker who works with a wide range of insurers.
- Carefully consider the insurance company’s provider network – what physicians or hospital systems do your employees prefer to have in network. Remember too that the same insurer likely sells a range of products with different provider networks. Thus, it is important to search the health plan’s provider directory for the products you’re interested in to confirm key providers or hospitals are included.
- Increased competition also means that employers – both small and large groups – will have a wide variety of access to products, such as health maintenance organizations, preferred provider organizations, etc. Thus, it is helpful to understand how these products functionally and financially differ. PPOs have the broadest set of doctors to choose from, but will likely be more expensive than a product with a HMO network or exclusive provider organization network, which does not typically cover non-emergency out-of-network services.
- Do the plans or providers offer any other value-added services like wellness programs and financial rewards for healthy behaviors? Some health plans even offer access to doctors online or reimburse for gym memberships, or they are willing to build in wellness benefits for interested employer groups.
- Is the plan or provider’s website easy to understand and can you quickly get assistance if needed?
- Research the quality of the health plan from independent organizations such as the National Committee for Quality Assurance, a national group that issues yearly reports on health plan quality and consumer satisfaction measures.
More health insurance companies are offering coverage in every state, so take the time to investigate your options and carefully consider what meets the needs of the budgets of you and your employees and the benefits to keep them healthy and productive employees. For those employers that do not currently offer coverage, take the time to evaluate the opportunity to provide coverage.
Beginning in 2016, large employer groups are required to offer coverage or pay a penalty, while small groups may be available for tax credits made available through the ACA. With more coverage options available, employers should take advantage of the competition among health insurers for their business and explore their choices, whether through a public or private exchange, purchasing directly from the insurer, or with the help of a licensed broker.
Sally Poblete is the founder and CEO of Wellthie, a software platform that helps people understand their health insurance options.
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