Many small business owners face their group health insurance renewal with a bit of dread.
Your insurance broker calls ahead of time to discuss your existing plans and asks you some key questions about any changes in your company and with your employees and if you feel your current plans fulfill your and your employee’s health insurance needs.
The easiest route is to just renew your current plan as is. But that isn’t always the best course.
Increases in renewal rates, changes in the financial health of your company for good or worse, a significant change in your employee participation and other factors may lead you to want to look at your options.
Based on your conversation, your broker will work up an insurance proposal in the form of a side-by-side comparison chart to make it as easy as possible for you to view the plans that best suit your needs.
Even though they lay it out as succinctly as possible, there are many factors to consider and it can be confusing.
The key components to look at are:
The Type of Plan – Is it an HMO or a PPO?
HMO means "Health Maintenance Organization." These types of plans offer a wide range of health care services through a network of providers that contract exclusively with the HMO. With an HMO, you choose one primary care physician you will use for your health care needs. If they feel a specialist is needed, they must refer you to one before you can consult with them. Most HMO plans do not let you see a health care provider outside of the HMO (called “out of network”), although there may be exceptions in the case of an emergency.
PPO means "Preferred Provider Organization." With these plans, you can chose which health care providers you want to see – the choice is yours. Each insurance carrier’s plan will have a list of preferred providers (referred to as “in network”). You may also use “out of network” providers, but those services may not be covered and certainly will not be covered as fully as if you used an “in network” provider.
Deductible - A specific dollar amount that your health insurance company may require that you pay yourself (called “out-of-pocket”) each year before your health insurance plan begins to make payments for claims. As a general rule (though there are many exceptions), HMO plans typically do not require a deductible, while most PPO plans do. And some PPO plans offer 2 -3 office visits per year at a set fee and these visits are not subject to the deductible.
Office Copay – A portion of the fee for medical services or supplies that your health insurance plan may require that you pay. For example, your health insurance plan may require a $30 co-pay for an office visit or brand-name prescription drug, after which the insurance company often pays the remainder of the charges.
Coinsurance - The amount that you have to pay for covered medical services after you've met any co-payment or deductible outlined in your health insurance plan. Coinsurance is typically expressed as a percentage of the charge or allowable charge for a provided healthcare service. For example, if your insurance company covers 80% of the allowable charge for a specific service, you may be required to cover the remaining 20% as coinsurance.
Out of Pocket - An annual limitation on all cost-sharing for which patients are responsible under a health insurance plan. This limit does not include premiums, balance-billed charges from out of network health care providers or services that are not covered by the plan.
Rx Brand - A drug that has a trade name and is protected by a patent (can be produced and sold only by the company holding the patent)
Rx Generic - A medication sold under its generic name; usually legal only after the patent has expired or if no patent was issued for the substance. Generic drugs are usually less expensive than proprietary medications.
Rx Non-Formulary - Non-formulary drugs are drugs that are not included in the list of preferred medications that a committee of pharmacists and doctors deems to be the safest, most effective and most economical. They are drugs not included in the drug list approved by the health care plans.
Of course, it is best to rely on the advice on a trusted insurance broker to help you decide which health insurance plans are right for your small business. But is helps to understand what you are looking at when discussing your options and making your decision.