Your Employees are Hurting

Unhappy manager     If you don’t provide health insurance to your employees it’s probably because you’ve decided you just can’t afford it. While it’s true that groups aren’t always cheaper there is another really important thing to consider. There is a dramatic difference between individual health insurance and group health insurance, and now more than ever. Here are 3 ways your employees will benefit from a group policy over the choices they now have on the individual marketplace:

Perhaps they really can keep their doctor.

     We all remember the famous promise that proved untrue. That’s because each carrier created separate doctor networks for their ACA Individual Marketplace plans and many doctors have opted out of those networks (or were asked to leave), in favor of other networks that offered more flexibility in managing care. For example, United Healthcare’s ACA network is called Compass Balanced whereas the network for their group plans is called Choice Plus. The Choice Plus network is considered a much better network. This applies to every major carrier in the industry. It’s more likely that your employee will find their family doctor in the Choice Plus network than the Compass Balanced.

They might save money.

Most groups are billed compositely, which means that older employees are going to benefit from being in a group with younger people. I recently wrote a group policy for a title company in Texas. One of their best employees was struggling because her husband had been diagnosed with cancer, couldn’t find an ACA plan that had MD Anderson in network, and was paying $1,800 in monthly premiums. Once the new plan was in place, MD Anderson was in network and her paycheck deduction was reduced to just over $600! Now how loyal do you think she feels about her employer?

They will typically get better benefits.

Group policies often provide benefits that you just won’t find on the individual marketplace. Nowhere is this more evident than with dental plans. I rarely recommend dental policies on the individual marketplace. The coverage is typically very limited, have long waiting periods, and simply do not cover things like orthodontia.

Most small businesses compete for the best talent and health insurance is one of the best ways to do it, especially since Obamacare has struggled to live up to the hype. Group insurance isn’t for every small company, but for some it may be the difference between keeping or losing your best people.

Overspending On Insurance

“When I give someone my insurance card, I want benefits!”
     I get it. If I had a nickel for every time I heard someone say, “Why should I pay monthly for a premium and still have to pay full price for my doctors visit or medications?” The answer to that question is a sharp pencil and a calculator.
     Remember the purpose of insurance—to manage risk—and unless we’re talking about certain life insurance products, health insurance is almost never considered an investment. It’s a sunk cost that we hope we’ll never have to use much less get a return on, because that means we’ve been really sick or injured! The goal then becomes to get the best value at the best price and to do that we have to look at more than monthly premiums. While cash flow is important to most people, it’s not the only way to judge which policy to pick. Often the most important way to judge is by looking at yearly costs, which include variables such as deductibles, coinsurance rates and maximums, and copays.  Here are some common mistakes people make when approaching health insurance:
  • Paying more for a lower deductible they will never meet.
     If you’re young and have no history of illness it rarely makes sense to pay more for a policy that has a lower deductible. If you aren’t likely to meet a $2,500 deductible, why pay more in premiums to have it that low? It’s often better to take a plan with a higher deductible, and add a supplemental policy that will pay your deductible for you. You will almost always save money and get better coverage that way.
  • Paying too much to get a plan with a copay.
     How often do you go to the doctor in a year? If it’s less than two or three times then it’s generally cheaper to take a plan without copays. Remember copays only pay for the visit—the part where the doctor takes your temperature, hammers your kneecap and asks you what’s wrong. The negotiated rate for that part of the visit can range anywhere from $150 to $250 depending on the doctor and the carrier. If you need blood work or x-rays, your copay isn’t going to cover that. This is where your calculator comes in handy. Often copay plans can cost $100/month or more than plans without copays. Lets say you go to the doctor three times a year. That means you have spent an extra $400, plus whatever your copay is for each visit. Let’s say your copay is $25. So the visit that would have only cost you $150-$250 has now cost you $425 in this scenario, and you STILL have to pay for any testing you have done. You get the idea.
  • Buying the wrong dental insurance, or buying it at all.
I imagine most agents would rarely tell you not to buy something, but in the case with dental insurance, there are not many good choices out there these days unless they are bundled with your employer’s group policy. If your teeth are healthy, have no family history of problems, and all you do is get them cleaned twice a year you’re often better off negotiating directly with your dentists for your cleanings. Most individual dental plans have waiting periods and offer very little coverage. That said there are plans available that can benefit you greatly if you know you are going to need work done.
  • Thinking that a major medical policy alone can meet all your needs.
     Supplemental policies are a great way to customize your coverage and if packaged right, can save you in monthly premiums and get you better coverage! Add an accident policy or a critical illness policy to a higher deductible plan and you will likely pay less per month. Consider a discount drug program instead of paying more for a drug copay if you don’t take tier 3 or 4 medications.
     A good agent can help you navigate your options and save you money. The best agents get paid from the insurance carriers and their services don’t cost you anything, and generally not using an agent won’t save you any money. Major carriers don’t have one price for using an agent and another for going directly to their website or through Find someone you trust and it could make all the difference next year!