1. Type of Plan and Coverage
The first would be deciding what type of plan you want to introduce:
•A traditional, fully insured employee benefits plan?
•An administrative services only (ASO) plan (some of the coverage is self-insured)?
•A health-care spending account (also known as an HSA or HCSA)?
•A combination of a traditional benefits plan or an ASO plan, and an HSA?
Traditional employee benefits plans usually include life insurance, dependent life insurance, accidental death and dismemberment, extended health care coverage – which includes prescription drugs, semi-private hospital coverage and emergency medical travel coverage, dental coverage, long-term disability coverage, and short-term disability coverage. A broker can help design one that fits your budget, through coverage maximums, co-insurance, deductibles, and per-visit maximums.
ASO plans typically self-insure health and dental benefits while using traditional insurance for life, AD&D and LTD benefits.
A health care spending account (HSA) operates like a bank account. A pre-determined allotment is put in the HSA for each employee, and they cannot exceed their allotment. An HSA can even be set up with different classes of coverage, each with different annual maximums. Any employer contributions revert back to the employer if not used by the employee after two years. HSAs have a longer list of eligible medical expenses than a traditional employee benefits plan.
A broker’s role is to determine which type of plan and coverage bets suits your business and budget.
2. Cost Sharing
Avoid paying 100 per cent of the premiums for your staff as there tends to be less “ownership” of the plan. If after a year’s time, you need to decrease your contribution from 100%, and introduce an employee contribution, employees will become disgruntled having to start paying for something that they previously did not have to. Insurance companies usually require employers to pay a minimum of 50% of the premiums.
Don’t base your choice solely on the price or the insurance company. All brokers can get similar quotes from the insurance companies. Base your choice on the broker’s ability to understand your needs and provide solutions that align with your business and budget. Forward looking projections should be provided to help you understand the long term cost of the various plan types and coverages.