Bud Bowlin has been advising business owners about health insurance and benefits for more than 35 years. For his 70th birthday, we gave him his own advice column. Got a burning benefits question for Bud? Send it to [email protected].
Hi Bud,
I run an agency of caregivers for adults with developmental disabilities, and I employ over 40 caregivers of all ages, abilities and genders. Next year, we’re hiring several more employees, and I’m trying to get us prepared for the ACA mandate.
I’ve started shopping for health insurance, and I don’t see great options for companies like mine. My company isn’t “one-size-fits-all.” How can I be sure I choose health insurance plans that meet the diverse needs of my employees?
Thanks,
Cares About Really Meeting Insurance Needs of Employees
Dear C.A.R.M.I.N.E.,
Nothing makes me happier than hearing from proactive business owners like you. By planning ahead for your company’s growth—and keeping an eye on your health insurance responsibilities under the ACA—you’ve put yourself in the best possible position.
When it comes to health insurance, you want to meet the needs of your diverse employees—but how can you be sure your health insurance plans match your people? We use a two-prong approach:
- Evidence. 18th century economist David Hume said: “A wise man proportions his belief to the evidence.” Like economists, good benefits advisors review all the evidence to make solid recommendations for your company.
- Experience. 14th century poet, John Lydgate said: “You can please some of the people all of the time, you can please all of the people some of the time, but you can’t please all of the people all of the time.” A good benefits advisor asks for your feedback. While Lydgate’s words are true, we certainly try to please all of your people most of the time.
The Evidence
Lots of factors go into choosing the right health insurance plans. A young, healthy workforce may find less value in comprehensive health insurance compared to an older workforce—and the needs of a single employee are different from a family with dependents. The job of a benefits advisor is to strike a balance between the budget you have and the benefits you want. We do this by reviewing factors about your company and recommending different types of plans.
Top 5 Factors in Plan Selection
- Employee Demographics. What are the ages, genders of your employees? Families?
- Geographic Location. Where are your employees located? Plan rates used to be based on geographic dispersion, but in 2016, they’ll go by employer’s zip code.
- Budget Constraints. How much variety can you offer within your budget? More than you think!
- Historical Data. What types of plans have you had? What did your employees think?
- Strategic Direction. Is the company growing rapidly or scaling down? To attract and retain talent, we advise growing companies to offer more plans and variety.
Common Health Insurance Plans
Preferred Provider Organization (PPO)
- The Gist: Employees have access to a large network of providers at a reduced rate. Employees can seek care with out-of-network providers for an additional cost.
- Best For: Families with children and single employees who prefer to research and choose their own providers
- Employer Contribution: Employers usually cover 50-60% of their employees’ premiums and 25-40% of any dependents’ premiums.
Health Maintenance Organization (HMO)
- The Gist: Employees coordinate all care through a primary care physician. With the exception of emergency services, all visits to other providers require a referral.
- Best For: Employees who like a one-stop-shop for preventative care, pharmacy, and specialists—all in one location
- Employer Contribution: Employers usually cover 50-70% of their employees’ premiums and do not cover dependents. If a base plan is established, then the employee is responsible for any remaining premium above the base amount.
High Deductible Health Plan with Health Savings Account (HDHP with HSA)
- The Gist: Employees pay less in monthly premiums, but must pay more out of pocket for healthcare services before insurance coverage kicks in.
- Best For: Young, healthy employees who don’t use healthcare benefits much, but want the security of a health insurance plan in case of major calamities.
- Employer Contribution: Employers usually make this the “base” plan for contributions by paying 80-100% of their employees’ premiums and little, if any, dependent premiums.
The Experience
When a benefits advisor carefully studies the evidence and knows the types of health insurance plans available, it’s possible to make a very good match for your company. These matches are called recommendations. As Lydgate points out, it truly is hard to please everybody all the time. If changes are needed, we make it happen. This is called Open Enrollment.
Recommending Health Insurance Plans
Let’s see how this comes together, using a private elementary school as an example. By reviewing the employee demographic, I learned that their workforce included staff of all ages, more women than men, and slightly more singles than families. By soliciting feedback, I discovered that employees were unhappy with the level of maternity care and pediatric care benefits provided by the school’s plans. In talking to the administrators, I found that the school was growing—and specifically looking to recruit young teachers.
I saw an opportunity to provide value through variety. Here’s what I recommended:
- A $1500 PPO on a National Provider Network. This plan is suited for employees with routine medical care needs—particularly families with kids. It also offers a much broader network approach for those employees who want a greater choice of providers.
- An HMO with $0 or minimum deductible. This plan is suited for employees who have ongoing regular medical needs for specific health issues. Having great access to specialists and facilities is a huge positive.
- A $3000 Bronze HSA Plan. This plan is suited for young, healthy people—or anyone who doesn’t need regular care. HSAs are also an excellent savings vehicle for employees of any age!
So what did the school think of their first year of new health insurance plans? With Open Enrollment right around the corner, I checked in to see if they’d like to make any plan changes. Everyone was happy—including more than a few expecting moms—and the school would be renewing their plans without changes.
Open Enrollment and Working with a Benefits Advisor
Recommendations aren’t set in stone, which is a good thing, because neither is your company’s growth. Open Enrollment comes once a year, and your benefits advisor can help you adjust your health insurance plans to meet your changing needs. Beyond being a great detective and making people happy, a good benefits advisor also keeps up with the latest laws. Just a couple years ago, it was common for health insurance plans to exclude pre-existing conditions. The ACA made those exclusions a thing of the past—a big win for your diverse workforce.
To get the best rates for your company, talk to a benefits advisor who has access to all markets and knows the evidence, the plans, and the regulations. My door is always open: [email protected].
Got a question about benefits and insurance? Send it to [email protected].
The answers on Ask Bud serve as basic guidelines and are for informational purposes only. Bud is a treasure trove of knowledge, but is unable to provide legal, tax, or fact-specific human resources advice. Once a question is submitted, Bud and Zenefits reserve the right to accept, reject, edit, modify, or otherwise change it. All content on the Zenefits website, including questions received and answers provided by Ask Bud, are Zenefits property.
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