5 Tips For Large Employers To Choose The Right Group Health Coverage

Sunday, March 10, 2024 18:01 Posted by Admin

If you’re a large employer researching group coverage for a valued worker population, your most important goal is to offer affordable benefits to better their health. As a large business – 51 plus employees – empathy toward the group’s health needs is very helpful in choosing the plan that is a good fit for workers and their families. This demonstrates to the group that you have their long-term health needs as an utmost priority when choosing the right plan.

Even though large companies face tax penalties under the Affordable Care Act (ACA)  when group health insurance is not offered to their employees, most employers recognize the value of coverage for their existing and prospective workers.

5 Tips to Choose the Right Group Health Coverage

Whether you are considering an alternative plan or will be offering large group health insurance for the first time in your company’s history, you can make the best decision by implementing these five tips before you purchase group coverage.

1. Know your total group health care cost. Don’t limit your total cost to the premium you pay monthly or annually. Calculate all out-of-pocket costs – deductibles, copayments, coinsurance, and out-of-pocket maximums.
2. Examine employee dependant coverage. Employees who have dependants – spouses and children – should have coverage options for these family members. Take note of the extent of medical coverage for employee dependants in order to avoid a worker’s potential exorbitant out-of-pocket uncovered expenses.
3. Consider customized group health coverage. To accommodate individual employee needs, think about maternal and newborn care. Make sure preexisting conditions are covered. These are considerations that should be covered from every employee’s Day 1.
4. Think tech-friendly for your employees. Always choose a group health coverage plan that is user-friendly for your employees. Eliminate as much paperwork as possible. Most providers have the entire enrollment and claims process digitized for employees’ ease.
5. Welcome employees to your group on Day 1. Waiting for group health insurance benefits for days, months, a year makes new employees feel displaced in the workplace. Offering health coverage from Day 1 avoids the aura of displacement and enhances an employer-employee solid relationship.

What are your choices for a large employer group health plan?

It pays to be well-informed before you choose group health coverage. There are sizable costs to consider. Remember, you’re making a financial investment in the productivity of your employees to increase your bottom line.

Fully-Insured Plan

If you choose to purchase a group health plan from a commercial insurer to provide coverage for your employees, you will be offering a fully-insured plan. As a large employer, you will pay a set amount of monthly premiums to the insurer. In exchange, the insurer will take on the financial risk of paying the cost of your employees’ medical bills by administering the plan.

With a fully-insured group plan, there is no additional medical coverage risk to a large employer because the exact cost of yearly premiums is known. However, if you employ a majority of young, healthy workers who are not expected to use the group medical coverage provided by your fully-insured plan, you will have spent a large amount of money with no refunding possibility from the insurer. Likewise, if your organization is able to take on this risk of loss, you will save money and meet your bottom line.

Self-Funded Plan

As a self-funded large employer, you will pay out of pocket for your employees’ medical claims as they arise. Organizations employing over 200 workers are the majority of those offering self-funded group health coverage. Opposite to a fully-insured plan, healthy employees will reduce your premiums.

It is recommended that a Third-Party Administrator (TPA) be selected by the large employer to process employee medical coverage claims as they arise. The TPA will take on the large employer’s burden of processing employee claims from doctors, hospitals, and pharmacies. These claims will be paid from a separate bank account opened by the large employer specifically to pay employee medical claims.

What are the benefits of purchasing stop-loss coverage to supplement self-insurance?

It is advised that large employers who choose to be self-insured purchase stop-loss coverage as protection from large, ongoing, serious medical claims – such as cancer treatment.

• Individual stop-loss pay for 100 percent of each employee covered by the large employer’s self-funded plan
• Aggregate stop-loss gives the large employer security of an annual premium that is not exceeded

What incentivizes large employers to purchase group health coverage?

The right group health coverage chosen by a large employer will never be resolved with a one-size-fits-all plan. Your mission when choosing a group health coverage plan should include:

• Edging out the competition by achieving your bottom-line
• Hiring and keeping the most productive employees in your industry or field
• Sustaining your overall employee health to maintain stability in the workplace

Never discount a plan before researching whether it will be a solid fit for your employees. By offering your large workforce the health coverage they need, you will be rewarded with stability and profitability.