Smart Benefits: More Employers Offering More Health Plan Choices

Monday, February 24, 2014

Employers faced with spiraling healthcare premiums are offering employees more plan choice as a way to regain some control.

Options Optimum for Employers and Employees

Offering a choice of plans means employers can fix their share of the contribution to the lowest cost plan to help control expenses long term – a structure considered to be defined contribution. And more options can help employers attract and retain employees.

For employees, having a choice means they can decide which plan is right for them. Rather than just having one plan that can make employees feel they are paying for benefits they don't use, adding plans that appeal to different types of employees helps workers feel empowered, boosting their satisfaction.

Law Firm Leads With Choice

One local law firm offers a choice of three plans to appeal to the different interests and needs of its employees.

  • There is a low, $500 deductible plan with a higher premium that appeals to those who use services more frequently and are willing to pay more weekly to have less out-of-pocket expenses when services are used.
  • They offer a Health Savings Account (HSA) plan with a $1,500 deductible for those who want a tax advantage and the opportunity to save money for future healthcare needs, even though they may not use services now. And the firm even contributes to the HSA for employees.
  • The firm has a $3,000 high deductible plan with copays on certain services rather than deductibles. This plan offers a really low premium and is designed for those who don’t anticipate using higher cost services and want to spend less money on health insurance.

With the choice of three plans, employees feel the benefits decision is in their hands, increasing employee satisfaction with the firm’s benefits program. The options also offer more financial flexibility for those who need it.

Carrier Choice a Trend

The trend towards choice reflects what’s happening in the healthcare marketplace. Until recently, carriers have limited plan choice, mostly to one to two plans. However, healthcare reform has created a marketplace of individual choice through the public exchanges. Both the Rhode Island and Massachusetts exchanges offer a variety of plans for individuals to select from. And, even small businesses going through the public exchange shops are able to offer a multitude of plan choices around a defined contribution model.

However, there’s a potential downside to the exchange plans: too much choice can overwhelm individuals who are trying to make a decision on which plan to purchase. Private exchanges emerging all over the country have responded with less choice than the public exchanges, but more options than an employer typically offers – as many as six plans. But private exchanges are new and their technology-driven platforms and enrollment features are meant for computer savvy individuals. For employers not ready to take the leap to a private exchange, adding plans may be a smart choice in the meantime.

Amy Gallagher has over 21 years of healthcare industry experience guiding employers and employees. As Vice President at Cornerstone Group, she advises large employers on all aspects of healthcare reform, benefit solutions, cost-containment strategies and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, and is often quoted by national publications on the subject matter. Locally, Amy is a member of SHRM-RI, the Rhode Island Business Group on Health, and the Rhode Island Business Healthcare Advisory Council.

  • 6. Rhode Island

    Overall Rank: 19

    Outcomes Rank: 30

    Determinants Rank: 13

    Diabetes Rank: 26

    Smoking Rank: 14

    Obesity Rank: 13

     

    Strengths:

    1. Low prevalence of obesity

    2. High immunization coverage among adolescents

    3. Ready availability of primary care physicians  

    Challenges:

    1.High rate of drug deaths

    2. High rate of preventable hospitalizations

    3. Large disparity in heath status by educational attainment

    Source: http://www.americashealthrankings.org/RI

     
  • 5. Maine

    Overall Rank: 16

    Outcomes Rank: 25

    Determinants Rank: 12

    Diabetes Rank: 23

    Smoking Rank: 29

    Obesity Rank: 28

     

    Strengths:

    1. Low violent crime rate

    2. Low percentage of uninsured population

    3. Low prevalence of low birthweight  

    Challenges:

    1. High prevalence of binge drinking

    2.High rate of cancer deaths

    3. Limited availability of dentists

    Source: http://www.americashealthrankings.org/ME

     
  • 4. Connecticut

    Overall Rank: 7

    Outcomes Rank: 15

    Determinants Rank: 4

    Diabetes Rank: 16

    Smoking Rank: 4

    Obesity Rank: 12

     

    Strengths:

    1. Low prevalence of smoking

    2. Low incidence of infectious diseases

    3. High immunization coverage among children & adolescents  

    Challenges:

    1. Moderate prevalence of binge drinking

    2. Low high school graduation rate

    3. Large disparity in health status by educational attainment

    Source: http://www.americashealthrankings.org/CT

     
  • 3. New Hampshire

    Overall Rank: 5

    Outcomes Rank: 7

    Determinants Rank: 5

    Diabetes Rank: 16

    Smoking Rank: 11

    Obesity Rank: 22

     

    Strengths:

    1. Low percentage of children in poverty

    2. High immunization coverage among children

    3. Low infant mortality rate  

    Challenges:

    1. High prevalence of binge drinking

    2.High incidence of pertussis infections

    3. Low per capita public health funding

    Source: http://www.americashealthrankings.org/NH

     
  • 2. Massachusetts

    Overall Rank: 4

    Outcomes Rank: 14

    Determinants Rank: 3

    Diabetes Rank: 10

    Smoking Rank: 7

    Obesity Rank: 2

     

    Strengths:

    1. Low prevalence of obesity

    2. Low percentage of uninsured population

    3. Ready availability of primary care physicians & dentists  

    Challenges:

    1. High prevalence of binge drinking

    2. High rate of preventable hospitalizations

    3. Large disparity in health status by educational attainment

    Source: http://www.americashealthrankings.org/MA

     
  • 1. Vermont

    Overall Rank: 2

    Outcomes Rank: 12

    Determinants Rank: 1

    Diabetes Rank: 4

    Smoking Rank: 9

    Obesity Rank: 5

     

    Strengths:

    1. High rate of high school graduation

    2. Low violent crime rate

    3. Low percentage of uninsured population  

    Challenges:

    1. High prevalence of binge drinking

    2. Low immunization coverage among children

    3. High incidence of pertussis infections

    Source: http://www.americashealthrankings.org/VT