How to Start Offering a Health Plan to Employees

Health care presents a classic conundrum for employers. On the one hand, providing a health plan as a benefit for employees is very expensive, and it costs more every year. On the other hand, if you don't offer health benefits, and your competitor does, you might find yourself watching some of your best potential employees walk out of a job interview and not look back, said Matt Tassey, a past president of the Life and Health Insurance Foundation for Education (LIFE), a nonprofit organization that educates individuals about seeking and purchasing insurance.

"Virtually any employee who is attractive to a business is attractive to other organizations as well, and health care is the No. 1 thing employees ask about after compensation," Tassey told bizjournals.com.

But if you've never offered a health plan at your business before, the research process can plunge you into an unfamiliar world of acronyms - HMO, PPO, HSA- and the options can be overwhelming.

So if it's your first trip into the waters of health insurance shopping, you would probably be wise to work with a broker or insurance adviser. Health insurance can be a confusing consumer decision to make, and having a trained professional on your side can make all the difference, notes Tassey, who recommends that people ask trusted friends, family, or professional contacts what broker they work with to obtain a good list of potential candidates.

If you can't get a referral that way and have to resort to cold-calling brokers, ask for the names of two or three of their clients who you can call to ask how satisfied they are with the service they're receiving. Tassey says it's the least you can do when choosing the individual who will handle one of your most important internal business decisions.

"You want to be dealing with an insurance adviser who has experience in your market, and it's very, very appropriate and very much expected for you to ask that person for a couple of references," he says. "If you're in a small business, you've got your family and your business, and probably a pet. But if you're going to marry your life to a business, it pays to take the extra minute and check those references."

Once you've found a broker, Tassey says he or she will help you consider what kind of plans to offer. He says a good broker often can give you a picture of what kind of health care plans are most common in your industry or for businesses of your size so that you can stay competitive.

If you're offering a health benefit for the first time, you'll also need to think about how much of the cost of your employees' health insurance expenses you're willing and able to pay, and whether or not you're willing to pay for health care for dependents of employees. And will you require new employees to work for your company for a certain amount of time before qualifying for benefits?

If you have a small business and choose to research insurance plans independently, without a broker, one piece of information might save you some time. Tassey says the fact of the matter is that where a 500-employee business has some bargaining power when it comes to their health plan rates, small groups are usually quoted a uniform price based on size, and it typically doesn't leave a lot of room for negotiation.

Speaking of price tags, another tip is this: When it comes to choosing a health plan, the bottom line is not always the bottom line. That's to say that while cost is a major concern for almost anyone shopping for health insurance coverage these days, what you get for the money should be considered along with the price tag.

Janice Torrez of Blue Cross and Blue Shield of New Mexico, recommends groups and individuals consider the restrictions or options that come with certain plans.

For instance, Torrez says, a plan that places no restrictions on what physician a member can see might come at a higher cost. Likewise, a plan with a low monthly premium could sport some whopping out-of-pocket expenses should one need a service like home health care, hospital stays, or medical equipment.

The LIFE organization advises when shopping for a health care plan, businesses and individuals start by considering what health-related services are important to them. Included in the list of services to consider are inpatient hospital services, outpatient surgery, office visits, medical tests and X-rays, prescription drugs, home health care visits, physical therapy, maternity care, preventative care for infants and children, and health screenings. Then compare the cost of plans that offer you those benefits.