Overview: Group Medical Benefits
Group medical insurance programs are continually evolving in an attempt to reign in costs. Add in HRAs, FSAs, HSAs, and a host of other acronyms that are hard to keep straight, and it becomes very confusing very quickly. Let us show you how these programs can work for you and your employees:
Exclusive Provider Organizations (EPO) are networks of medical care providers which consist of Primary Care Providers (PCPs), Specialists, Hospitals and Ancillary Providers. Coverage is limited to these In-Network providers except in a true emergency.
The Primary Care Physician coordinates the treatment needs and access to Specialists (Referrals), for Surgery & Hospitalization (Pre-certification) and any Medical Tests (Pre-authorization).
An EPO plan is generally the least expensive approach as the patient has the lowest level of freedom with provider care selection.
Point-of-Service (POS) plans include an EPO for in-network coverage but also allow insured to go out-of-network and visit the provider of their choice. The out-of-pocket cost while using an in-network provider through the EPO will be much lower than using an out-of-network provider as all services and providers have agreed to reduced fees.
Out-of-network services are typically reimbursed at a specific coinsurance level (typically 70% to 80%) after satisfying a deductible. Maximum allowable charges for out-of-network services are limited to a specific percentile of “reasonable & customary” charges or as a percentage of medicare allowable charges (eg 150% of Medicare).
Preferred Provider Organization (PPO) plan consists of a network of health care providers that an insured member has complete access to without referrals. PPO networks are typically significantly larger than EPO networks and provides insureds with a much greater choice of providers. An insured member also has access to providers outside the PPO network.
Health Saving Account (HSA) compatible medical plans entered the market as a different means of controlling employer medical insurance costs. These are called High Deductible Health plans or Consumer Driven Healthcare plans. CDH plans have a “high deductible” that the member must meet before the insurance coverage “kicks into play”. Office visits, prescriptions, hospitalization, etc. all go towards the deductible first. After the deductible is met then then plan behaves like a traditional medical program. Typical copays for office visits and prescriptions take effect after the deductible has been satisfied. The exception to this is preventive care which under Health Care Reform is covered at 100% immediately.
Tied to the CDH medical plan is a Health Savings Account (HSA). The HSA is the employees personal account and any funds in the account always belong to the employee regardless of whether the account was funded by the employee or the employer. The employee uses the funds from the HSA to pay for any out-of-pocket expenses such as deductible, copays, coinsurance and the lengthy list of items and services allowed under a Flexible Spending Account (FSA).
When designed properly, CDH plans encourage employees into making more cost efficient care decisions. CDH plans require proper planning, and implementation. Employee education is a critical component to the success. The Broad Reach Benefits Team has extensive experience designing and implementing these programs. We’ll assist you and your employees through every step of the process.
Whether you have 30 or 1,000 employees, provide your employees with a choice of medical plans, not just a one-size fits all plan.
Employees are diverse in skills, personalities and their insurance needs. Offering employees a choice of medical plans creates an opportunity to best meet the needs of your employees and assists in lowering the employers overall costs. While younger and/or healthier employees may prefer a lower costing EPO other employees may still wish greater freedoms of provider choice and are willing to contribute higher payroll deductions for that option. Employee contribution levels can be set to create “steerage” to the lower costing EPO plans without reducing benefits.
Providing employees with a choice of programs will save the employer money while empowering the employees.
Most group medical plans are written on a fully insured basis whereby employers are “pooled” together with other companies of similar size in the same regional area. Rate increases are geared towards the overall claim experience of that pool of employers. Employers with healthy employees and low claim usage will offset costs for other pool employers with severe medical costs. An alternative to this approach is self-insurance or an Administrative Services Only (ASO) contract.
ASO contracts allow companies to save money in years when they have lower than expected claims. Conversely, in bad years they are protected by stop loss insurance if claims exceed expected levels.
The key elements of an ASO plan are:
• An employer will only pay for the medical claims that are incurred by their own company.
• Employer has complete flexibility to design their own employee benefits program and may eliminate expensive state mandated benefits that are not needed by your employees
• ASO accounts are generally written with Individual Stop Loss insurance that would protect a company from a catastrophic claim in excess of a specific amount for an individual.
• ASO accounts are also written with Aggregate Stop Loss coverage that would protect a company for total claims in excess of a specific amount.
Self-Insurance Options for Smaller Employers:
Due to the fact that self-funding allows group plans to avoid many of the Health Care Reform regulations, including some fees and modified community rating, insurance companies have introduced innovative self-funded plans for small groups, some down to 5 or 10 employees.
Also called Fixed-funding or Level-funding, these products have all the components of self-funding bundled together to create a turn-key solution for small employers. They typically include set monthly costs to protect against swings in claim costs, and should state clearly what your maximum costs could be. The well-designed products act and feel like a fully-insured plan, but allow you the opportunity to save money when your claims run well, and avoid many of the costly Health Care Reform requirements.
Broad Reach Benefits, in Madison, New Jersey will help you:
- Determine if self-funding makes sense for you
- Choose the appropriate components of the plan
- Fully understand all risks
- Understand the carrier’s underwriting philosophy
International Plans: Medical Benefits for Expatriate, Third Country Nationals, Inpatriate Employees
Do you need to provide benefits for Expatriate, Third Country Nationals or Inpatriate (from the U.S. perspective) employees? We work with a wide variety of providers from around the globe to provide programs that will give your employees and their dependents piece of mind knowing that no matter what comes up they will get the services and support they need 24/7 anywhere in the world.
Talk to us about your company’s specific needs in the international community.