As people move into C-suite positions, they take on new responsibilities, such as managing the company’s health insurance plan. Understanding health care plans can be intimidating for someone who has never worked with insurance before. To help get you prepared, we’ve covered the overview of what executives should know.
Understanding Coverage Requirements
Under the Affordable Care Act, your organization is only required to provide health insurance if you have 50 or more full-time equivalent employees. If you do, you need to offer health insurance to your full-time employees or your organization will owe a tax penalty.
If you’re not required to offer health insurance but do set up a plan, it must be made available for all your full-time employees. If you decide to cover part-time employees as well, it must be available for all part-time employees. You can’t pick who does and doesn’t receive coverage. However, you need to make the plan available to these employees. If they don’t sign up, you’re not penalized.
Finding the Right Plan
As you compare plans for your organization, consider a few points. Price is of course an important one. However, it shouldn’t be the only factor in your decision. You should also see how much every plan charges for out-of-pocket expenses, such as deductibles and co-payments. Your employees need to pay these whenever they use the plan. High out-of-pocket expenses can wipe out any benefit of a lower premium, especially if you have older workers who regularly use health care.
Check the provider network before signing up. You could also ask your employees for a list of their doctors to make sure they’ll still be available on the new plan. Of course, factors like customer service, claims payment processes, and the ability to add on ancillary offerings (like vision, dental, wellness programs, etc) should also be considered.
Once you decide on a plan, your company holds an enrollment period for employees to sign up. After enrollment ends, employees can’t sign up or change their benefits until the following year. Enrollment is a chance for your employees to learn about the plan as well. Ask if a representative from the insurance company can hold a presentation to explain how the new plan works.
According to the Kaiser Family Foundation, insurance premiums rose 20 percent since 2011. If your employees make smart insurance decisions and stay healthier, your organization can control costs. One option is to set up workplace wellness programs to encourage employees to exercise and quit unhealthy habits, such as smoking.
The HR decision-maker could also teach employees tips to use the plan more effectively, such as buying generic versions of prescriptions instead of more expensive brand-name options (and using a mail-order pharmacy option.) If every employee makes better decisions, your plan’s premiums won’t increase as quickly.
Understanding health care is important for executives. With this information, you can effectively manage your plan as part of your new position.
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