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Ask a Zenefits Advisor: How Do I Choose the Right Health Insurance Plans?

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?


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:

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

  1. Employee Demographics. What are the ages, genders of your employees? Families?
  2. 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.
  3. Budget Constraints. How much variety can you offer within your budget? More than you think!
  4. Historical Data. What types of plans have you had? What did your employees think?
  5. 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)

Health Maintenance Organization (HMO)

High Deductible Health Plan with Health Savings Account (HDHP with HSA)

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:

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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