Picking your company’s next health plan is one of the most important benefit decisions you’ll make every year. It’s also a stressful one because of the high cost of health care and the difficult compromises you need to make. We’ve covered three quick exercises that can help you narrow it down to the right choice.
1. Employee Preferences
Before looking at plans, survey your employees and ask for what they would like in the new health insurance plan. Make a list of features such as low deductibles, low monthly premiums, generous coverage for prescriptions, a provider network that lets them see any doctor, etc.
Ask every employee to rate their preferences in numerical order so you can see what needs to be a priority for the next exercise.
2. Must-haves Versus Nice-to-haves
You should divide employee preferences for your plan into must-haves and nice-to-haves. Your budget is the clearest must-have. If you can’t spend more than a certain amount on your plan, that’s not something you can get around.
Everything else is a bit more of a judgment call and should be based on employee preferences. If every single employee asks for better prescription coverage, make that a must-have. If only a few ask, it’s a nice-to-have. Sometimes the difference between the two depends on the situation.
For example, if there are only a few doctors in your area, a provider network that includes them is a must-have. You would need to be careful of plans with a restricted network, like HMOs. On the other hand, if you live in an area with plenty of doctors, maybe it’s a nice-to-have. An HMO could still provide your employees enough options for care.
3. Goals for the Plan
You should also figure out your goals for the health plan. For example, what percentage of your workforce do you hope to cover? You may need to offer a more generous plan if not enough employees are signing up year after year.
You could also control costs by setting a maximum target for how much your premiums should go up every year. According to the Kaiser Family Foundation, premiums rose 20 percent since 2011, roughly 4 percent per year. Your goal could be for next year’s increase to be only 2 percent.
To hit this target, you could set up a workplace wellness plan and teach your employees to make better decisions for using insurance, such as buying generics versus brand-name prescriptions. Every year, see if you hit your targets. If you fall short, figure out why. Tracking your results is a key step toward improving your performance.
Make sure to take a few minutes to run through these mental exercises before signing up for your next health insurance plan. The better results will be well worth the effort.
David Rodeck is a professional freelance writer based out of Delaware. Before writing full-time, he worked as a health- and life-insurance agent. He specializes in making insurance, investing and financial planning understandable.