As the costs of medical benefits soar, employers are in a mad rush to re-bid their health insurance coverage for the best possible deals. It can be next to impossible to make an informed decision given the arcane policy terminology and agent-speak that can confuse even the most savvy business owner. Not to mention the sheer volume of information. And who has the time to wade through and decipher all that information? If you are one of those lucky ones given the responsibility of selecting another benefits provider, we have a few suggestions for you. The following steps are a process that can help you gather all the information you will need, in a manner that won’t overburden your workload, and make a decision that you won’t later regret.
1. Its important first, to have a good understanding of three things:
- The needs and goals of your company. Most companies align their benefits programs with their goals for recruiting and retaining employees including long-term corporate goals concerning employee welfare.
- The needs and goals of your employees. For many employees, some of the things most important attributes for a benefit plan to have are: the ability to make choices concerning their coverage, costs, the quality of coverage, and that their current physicians are part of the proposed provider network.
- What exactly your budget is and how the benefit plans under consideration will impact your financial situation. Wanting a certain plan for it’s more robust benefits may cause larger problems down the road if it doesn’t fit your financial planning.
2. Select a broker or consultant to assist you. We suggest calling major insurance carriers or managed-care companies or other employers in your area to get the names of brokers and consultants they would recommend. Once you’ve selected a list or recommended brokers and/or consultants, we suggest you prepare a brief request for proposal (RFP) and send it to the brokers and consultants on your referral list. An RFP allows you to compare responses and fee structures. The responses you receive in return should help you determine which broker or consultant most closely matches your needs. We suggest that for your final selection, you meet with them in person. We further recommend you choose someone who doesn’t represent just one insurance carrier but rather someone who represents a number of different carriers. Your are more likely to find a policy more closely tailored to your needs.
3. Once you have found the right broker or consultant to assist you, make sure they draft bid specifications (a questionnaire that serves as a comprehensive and precise written interview with potential health insurance carriers) for distribution to appropriate health plans. The bid specifications should be detailed in asking for alternatives (a PPO versus an HMO, for example) and should include historical and utilization data (statistics about how often services are used by plan members). They should also request multi-year rates.
4. The broker or consultant should then conduct a thorough analysis of the proposals, highlighting the differences between them, noting any unusual exclusions, significant inclusions, or limitations of coverage. The analysis should also include a detailed evaluation of the physicians and the hospital network, showing the overlap of providers between your current plan and the proposed plan, as well as proposed fees (annual premium payments). You will also want to interview the finalists’ agents.
Having medical benefits for employees can provide a healthy return, if selected and implemented carefully. A good benefits plan can be a strong plus in recruitment, increase loyalty and productivity, and increase employee retention. , While expensive, a good plan can save your company a great deal of money over time. It’s a good way to stay healthy.
Have a safe and enjoyable summer!