Keeping Your Health Care Up and Your Costs Down

With the wide array of health care insurance choices out there, you want to make sure you are offering the best — and most affordable — products for your employees. Here’s how to make everyone happy while also keeping your eye on the bottom line.
1. Set company contributions for employee health care at a flat dollar amount and offer both a “high” and a “low” plan so that employees can choose what best suits their specific needs. This is better than offering just one plan and telling the staff that their payroll contribution has gone up. At least the employee is given the chance to “buy down” to a lower-priced plan.
2. In the past year, insurance carriers in the New York metro area have begun offering split co-pay plans where the co-payment for the primary care physician is lower than the co-payment for a specialist. This split co-pay provides a financial incentive for a covered employee to go to the lowercost provider for routine care, eliminating some unnecessary — and more costly — visits to a specialist. A specialist fee is usually several times what a primary care physician will charge for the same office visit. Consequently, carriers are giving significant premium discounts for groups that choose these plans.
3. Groups are using two different insurance carriers with different tier structures so as to give each dependent category the lowest possible rate. For instance, you can offer two plans with different insurance companies with different rating structures where the rate for individuals is about the same. The single people can choose the carrier they prefer. Those needing family coverage will choose the carrier offering a two-tier rate, which offers rates for singles and families (some carriers offer different rate structures, while others do not).
Those in need of coverage for themselves and a spouse or a child would choose the plan that offers the lowest rate for their dependent status.

Note on HSAs in New York:

HSA products are only now reaching the market and are not yet competitively priced (premiums do not fully reflect the high deductible). Accordingly, they may be attractive only for employees with minimal health needs and/or those maxed out on 401(k)s who are looking for alternatives to save money in tax-favored accounts. Consider offering your employees a Health Savings Plan option in addition to a traditional health insurance plan. (See “Is A Health Savings Account Right For Your Company?”)