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Navigating the Health Care Maze

March 30, 2015

Navigating the health care maze can seem like 10,000 questions.  In this post, I have addressed a number of questions that face small business owners every day. 

How does an employer choose the correct plan for employees? What options are available and which ones fit the needs of all of the employee’s healthcare consumption? Are high deductible plans worth it? Your employees range from age 20 to 60 plus with different aged dependents too.  Some employees only need coverage for themselves and others need to cover dependents. Do you offer one plan, two plans or possibly three plans?  What is the size of your business?  Under or over 50 employees?  The questions go on and on and on.  
What are the plan differences between a Bronze plan, Silver plan, Gold plan or the Platinum Plan?

Do you understand what comes first for which services, such as a co pay, deductible, coinsurance, etc.? When is the deductible met, do copays go towards the deductible, do they go towards the maximum out of pocket what is the maximum out of pocket? What happens if an employee goes out of network (OON)? How will they be reimbursed? A percentage of (AB) allowed benefit, (R & C) reasonable and customary, a percentage of the Medicaid reimbursement scale? What happens if an employee is going to a physician that is a concierge or boutique practice? Is your deductible based on your plan year or calendar year?  The questions surrounding deductibles are incredibly confusing.  We suggest contacting a professional to sort through it with you so you and your employees don’t get stuck with fees and penalties.

A whole new set of questions arises when beginning the process or reviewing your current plan. Have you looked at all of the insurance companies offering plans in your state? Are you located in DC, VA or MD? Where do the majority of your employees reside? In most cases employees see physicians that live near them not near their workplace. So now that you have identified that step, next step is to determine how many plans you want to offer or if you do not want to offer any and face the employer’s tax penalties. How many employees do you have, not necessarily the entire company, but employees who will want to be covered by the employer’s plan? I recommend scaling the number of plans to the amount of employees you have.  For example, if you have 15 – 50 employees, I recommend two plans but if you have over 50, three plans is better. 

Different employees have different needs from their health insurance plan. A single employee in their 20’s or 30’s has different needs than an employee in their 40’s with a spouse and children. The young employee could choose a plan with a high deductible and low premium. The employee with the spouse and children likely won’t want to have a high deductible, they know that they will be using the plan frequently and opt for co-pays instead. Why have a high deductible plan, is it worth it? Usually a high deductible plan has a lower premium so based on your contribution and the employee’s contribution an employee will choose the high deductible plan just based on cost. Important to note here that whether you choose a high deductible plan that is a Health Savings Account ( HSA )or not an HSA, PPACA mandated that regardless of the type of plan that you have,  everyone is entitled to one preventive exam per plan year at no cost. 

Is an HSA right for you and your employees? The good news with an HSA plan is that they usually have a lower premium. All costs are borne by the insured up to the plan deductible before the insurance company starts covering your claims. Another plus is that with an HSA your costs up to the deductible are tax free. As the employer you can contribute to the HSA for the employee or not contribute. (Pros & Cons of HSA, s could take up a whole article themselves, they are right for one employer and wrong for the next employer).  You could offer an FSA as a tax free benefit for the employees.

Another question that every employer has is, how much do I contribute for my employees, and or their dependents? I have been assisting employers with employee benefits for 30 years. Every employer comes up with a different contribution method for their employees. How much do you want to contribute to the total premium, keeping in mind the ACA rule on employees’ contribution cannot exceed 9.5% of their annual earnings? Also, to attract and retain quality employees you need to be competitive in the marketplace by offering affordable healthcare benefits.
My first suggestion to my clients is to consider your budget? Based on that I will bring plans to the table that are the best fit for each individual company. From there we can determine the proper employer contribution level for said company. We can then review the plans to get closer to what is right for that  company and its employees. Next step, I suggest that the department in charge of benefits hold an employee meeting and present the options to all full time employees. If an employee meeting is not possible there are many ways to communicate the benefits to your employees.
For those of you concerned with how the Patient and Protection Affordable Care Act (PPACA) effects your company, please continue reading.

I find the most important aspect of compliance is to find out if you have over 50 employees.  There are a number of ways to do this.  You or your payroll provider can run reports on your full time employees, seasonal employees, part time employees to get averages. How many full time equivalents (FTE’s) does your company have? Employers with 50+ employees must look back at the previous year in increments of 3, 6, 9 or 12 months to determine if you have more than 50 FTE’s, and then must offer health insurance to them.  You can waive the first 30 without facing a penalty ($3,000 per person) should you choose not to offer health insurance.

Do you realize that starting January 1, 2015 you have to report in 2016 the amount that you the employer contributed for each of your employees for their employer sponsored health insurance? New tax forms require the employer to submit to the IRS the total annual premiums.

Please do not make the mistake of encouraging any employee to obtain individual coverage and then compensate them for it. The penalty per employee is $100.00 a day to a maximum of $ 36, 500 per employee although, employers should be sure to obtain a waiver of coverage signed by employees who choose not to enroll in the employer’s contributory healthcare plan(s).
These questions and more can be answered by contacting me, Alan Schulman at the phone or email below.  This is a tricky maze and Insurance Benefits and Advisors is here to help.

Alan Schulman | Principal
Insurance Benefits and Advisors
15883-B Crabbs Branch Way
Rockville, MD. 20855
(P) 301-762-5372
(F) 301-762-5373

•    President, Maryland Association of Health Underwriters (MAHU)
•    Maryland  Joint Legislative Committee Board Member 
•    Maryland Connector/Exchange SHOP Advisory Committee Member
•    Certified Producer For The MD. & DC  Health Exchanges
•    Greater Washington Association of Health Underwriters ( GWAHU) Past President
•    National Association of Health  Underwriters (NAHU) Health Underwriters Political Action Committee (HUPAC) National  Board of Trustees