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.
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.
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.
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.
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.
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.
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:
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.
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