By Steve Selinsky, Director of New Business, Health Alliance Plan (HAP)
Providing employees with great benefit options while still controlling health care costs can be frustrating. Health care exchange options are something to consider. They can help you match your employees’ needs with the health plan that fits each of them best, all while managing your costs as an organization.
Private exchanges are online marketplaces (not administered by the government) that let you select plans from health insurers like Michigan’s Health Alliance Plan (HAP). There are currently two types of private exchanges: in some markets, employers can allow their employees to select from multiple insurers, while in most markets, the employer selects one insurer and their employees can then select from a suite of different plan options from that single insurer. Far more health insurance companies participate in private exchanges than in the public marketplace, also known as the Small Business Health Options Program.
To gain flexibility, many small business employers are turning to private exchanges with a defined contribution plan in which the employer provides employees a fixed dollar amount contribution to buy health insurance. Employees can use those funds to pay for the health plan they select for themselves, choosing any plan from any option on the exchange.
Private exchanges also enable businesses to budget their health care costs better and to enable employees to use their dollars as wisely as possible. Employees who want the best benefits may be willing to pay a little more for the plan of their choice or to pay more out of pocket. Consequently, even small employers can secure the ability to give their staff a broad range of individualized health care benefits.
Each private exchange offers a different set of services to employers, so it is very important to examine all the available carriers to find the type of technology tools and programs that will help your business the most.
At HAP, we see a clear trend toward private exchanges. Over the next five to 10 years we expect the market to shift in that direction as health care costs keep increasing for businesses. But before you make your choice, it is important to consider these four points:
- Do your homework to determine which private exchange and suite of product options best fits your company and your employees. If you run a hot technology shop populated with younger millennials, a high-deductible plan might be a prime offering for your staff. If your workforce is older, or has chronic health conditions, your employees are likely to favor a low deductible that gives them access to full coverage sooner.
- In considering various plans, look for preventive services and screenings that are 100 percent covered, without any deductibles. Most carriers offer a long list of such services — with screenings designed specifically for adults, women and children — as well as health and wellness resources. Detecting and managing a potential health issue before it becomes a problem benefits the employee and the company, resulting in a healthier employee base and much lower costs.
- Know that choosing a plan is not a lifetime decision — you will have the opportunity to change it once every year. So throughout the year, watch for instances in which changes in your health plan offerings could be improved for employees and the organization. At the same time, see what is working best and capitalize on those programs in your next open enrollment period.
- Keep in mind that every business and every workforce has its own individualities and needs. What fits a competitor in your field may be entirely wrong for your company. Therefore, take advantage of the wealth of information you can find online, and ask questions of the insurance agent or broker who knows the market and can best help you analyze your company’s needs.
Steve Selinsky is Director of New Business for Health Alliance Plan, where he is responsible for all group new business sales for HAP.
To learn more about affordable healthcare plans for your small business, visit Health Alliance Plan.
For more tips, inspiration and Detroit small business stories, visit smallbusinesspulse.com.