As a small business owner, health plan coverage takes your time and money. Every year. Leaving you exhausted and frustrated with health insurance. Properly evaluating health benefits will help unlock more nuanced value from your health insurance. Coupling health benefits with your health plan will get you past the year-to-year loop of increasing costs and decreasing coverage.
Evaluate Health Plan Insurance for Coverage
Cost might be the most obvious place to start. But when you start with cost, you leave with sticker shock. Cost should be a factor, but not the gating factor. What you need is a diamond in the rough.
No one starts their home search by looking at the home they can afford, they start with their dream home. What is the ideal healthcare plan for your company? Why? Is it the coverage, the flexibility, or maybe they are just easy to use?
Health plan insurance coverage should be at the top of your evaluation criteria. Underline it, circle it, write it down again. Then work to define what it means to you. Health plan coverage helps outline what your employees need from healthcare. That might include preventative, emergency or dependent care.
Some of this coverage will be defined by your healthcare provider, some will be defined by you. Coverage will set the pace for your cost analytics parameters. Without it, you are flying blind. Use coverage as your beacon. Weed out plans that don’t offer the coverage you expect, no matter the price.
Does Your Health Plan Offering Fit Your Employees?
Each employee is different. You already know this. How can you put a millennial and baby-boomer on the same insurance plan, they don’t even live on the same planet! Younger employees clearly have very different needs than employees with children.
In an on-demand world, employees expect customizations. This means your health plan offering has to be customizable to meet their needs. How can you offer one plan and still make it feel customizable for your employee’s lifestyle needs? This will be a challenge, but using other health benefits that work in conjunction with your health plan will help.
Think of your health plan as the starting point. Layer additional benefits offering on top to make it feel more robust (at a much lower cost).
Health Plan Coverage Cost Comparison
Speaking of cost, we can’t just ignore it. According to the Bureau of Labor, in 2017, health insurance cost employers an additional 7.5% of total compensation, on top of salaries and wages. We all know these costs continue to rise.
Finding a new alternative to high coverage, but high premiums plans like PPO has become a requirement for small business owners. Many employees expect the coverage these plans typically offer. What is a small business owner to do? Taking a new perspective, like long-term health cost coverage might just provide the answer. More on that later.
Cost comparisons need to include:
- Expected vs. unexpected costs (premiums vs. out-of-pocket costs)
- Short vs. long-term costs (yearly vs. lifetime costs)
Most cost comparisons will focus entirely on premium and out-of-pocket costs. This helps define the majority of yearly health costs. Did you know a couple can expect to spend $275,000 for health cost in retirement? This is on top of Medicare coverage! As a small business owner can you help your employees save today for these costs and still manage to keep your company profitable?
Understanding the need for long-term health coverage can quickly rebalance the cost equation. Especially when you consider all employer-sponsored health plans have to be renewed each year.
Other Health Plan Coverage Considerations
- Health Plan Flexibility – Premium quality health plan coverage is great. Premium quality health plan coverage that you can’t access is not! Access is the golden ticket to all things health coverage related. Make sure you understand how (and how often), your employees can access their health insurance. You want health insurance to be there when you need it, not a 90-minute drive to your closest in-network provider.
- Long-term Care – Your health is for life, good or bad. Why does your health insurance renew every year? It’s hard to predict what you will need next week from your health insurance provider, let alone next year. Adding health benefits, like an HSA, can ensure you are adding long-term coverage to your yearly health plan. You can plan for today and tomorrow when you couple an HSA with an eligible healthcare plan.
- What About Next Year? The biggest concern with selecting a health plan is that you have to do it next year. If recent history is any indication, next years health plan is going to be more expensive than this years. We don’t have a solution for this yet, but taking a longer-term view always seems to help.
Putting all the pieces together to create a cost-effective and high coverage health plan that works for all of your employees is easier said than done. You not only need to balance external market factors but also the complications of balancing short-term needs with long-term health expectations. Do your best to look at all the options so you can combine individual benefits to create a layered (and better) health benefits approach. It will help you this year and for years to come.
If you need more help with health account decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.