What do you do when health insurance prices look like they are simply too good to be true? New carriers frequently enter the health insurance industry with money-saving plans that help them compete in a tough market, but sometimes the prices are low enough to make you think twice. How can you tell which plans are legitimate and which are scams? Here are some tips on how employers can research these carriers and what warnings signs to look out for
Medical Discount Plans
A medical discount plan is one example of a product that deceptive carriers may pretend is real health insurance. These plans don’t meet ACA compliance requirements, so you may be left footing a fine for not offering real health insurance to your employees. Discount plans aren’t insurance at all; they simply provide discounts on services, leaving you and your employees responsible for the rest of the bill. Watch out for deceptive advertising like “up to 70 percent off.” By “up to,” they really mean anywhere from 0 to 70 percent off of services.
Fixed Benefit Indemnity Plans
A fixed benefit indemnity plan is another type of health plan that costs less than typical insurance but won’t meet ACA compliance rules. These plans may draw in employers and individuals alike because their health insurance prices are less per month, but appearances are deceiving. They’ll reimburse a specific amount per medical service, such as $1,000 a day per hospital stay, but they don’t cover the complete cost or associated costs, such as fees for tests, medicine and surgery.
Questions You Can Ask to Spot Deception
When you’re researching lower-priced plans for your business, there are a few questions you can ask to help determine if the carrier is legitimate. Ask if the plan is ACA-compliant, and ask for a brochure that spells out exactly what is covered. Pushy sales tactics or limited-time offers are a sign that something isn’t right. Other red flags include super-low prices that are out of line with plans from well-known insurance carriers and the need to pay membership fees or join a union to take part. You should also read through reviews online and check out the carrier’s Dun & Bradstreet or Better Business Bureau ratings.
Talk to independent licensed brokers, and see if they’ve heard about the carrier. You can even talk to your state insurance commissioner’s office, which you can find through NAIC.org, to see if the carrier is licensed. This type of research can clue you in if something turns out to be a little too good to be true, saving you a lot of headaches later on.
Stephanie Dwilson has extensive experience providing expertise on topics including health, law and marketing. She’s a science journalist published by Fox News, a marketing expert and an attorney with expertise in personal injury law. She’s also a small business expert featured by Businessweek and Millionaire Blueprints magazine and has worked as a marketing consultant for ministries and as a PR lead for one of the largest churches in America.