Care providers face specific challenges that can increase health insurance costs and make selecting health insurance options for their organizations difficult. Every detail becomes an overwhelming decision, and you don’t want to get locked into a costly solution for you and your employees.
Ultimately, you want to choose a cost-effective health insurance option that benefits your employees and your bottom line, and Procare HR is here to help. Let’s dive into options organizations offering home care, skilled nursing, senior housing, assisted living, disability services, and long-term care should consider when selecting a new health insurance plan.
2023 Health Insurance Options
Fully Insured Plans
When you think of insurance, what comes to mind is usually a full-insured health plan. Fully insured plans are traditional group plans where the employer pays for all or a portion of the health insurance premiums for their employees. It’s administered through a commercial insurer, such as UnitedHealthcare, Blue Cross Blue Shield, Aetna, or Cigna.
Fully insured plans are popular because the insurance carrier assumes the risk. The cost is based on a variety of factors including the number of employees opting in, the claim risk of the employees, turnover rates, and more. Traditionally, the rate is set for the contract year and premiums are paid monthly. The insurance carrier calculates the factors annually and adjusts the rate accordingly.
Fully insured plans tend to be expensive and are subject to annual price increases. However, a well-executed fully insured plan can save care providers money while providing sufficient health coverage to employees.
A disadvantage of fully insured plans is the inflexibility of the plan’s design and cost. Usually, employers only have a couple of options from the carrier.
Self-insured plans shift the risk and reward to the employer. While it’s popular for large care providers (500 or more employees), self-insured health plans are not ideal for every organization.
With self-insured plans, the employer collects premiums from employees who opt-in and assumes the responsibility of paying employees and their dependents’ medical claims out-of-pocket. The administrative burdens usually are outsourced such as enrollment, claims processing, and provider networks.
Self-insured plans offer more flexibility than fully insured plans. Companies can customize their health care plan to meet their needs, and since the employer is paying the claims, there may be a surplus from unused claims. However, it is also possible that there is a deficit. To help offset claims, employers can offer initiatives to improve the overall health of their workforce, such as cessation initiatives, early cancer screenings, walking challenges, ergonomic equipment, disease management programs, and more.
The risk with self-insured plans is the potential for high-cost claims, such as cancer, congenital abnormalities, and dialysis. To combat this, companies can elect stop-loss insurance (or excess insurance), which protects against catastrophic or unpredictable losses. Under a stop-loss policy, the insurance company bears the risk for losses that exceed certain deductible limits.
Employers pay a set monthly premium to an insurance carrier or Third-Party Administrator (TPA) in a level-funded insurance plan. The premium funds are used to pay claims, stop-loss coverage premiums, and administrative expenses by the carrier or TPA. The monthly payment is calculated using the estimated maximum cost or worst-case claims projections.
The benefit of level-funded plans is that the employer receives a refund when the actual claims are less than projections. Organizations with 3-99 employees may find advantages in a level-funded plan. A level-funded plan offers no control over the design, cost-containment, TPA, and more. Further, you can expect rate increases if you spend more than your allotted funds.
While there is a possibility of a refund due to unused claim funds, the insurance carrier will likely keep a large portion of any remaining funds, meaning the employer is unlikely to see a cash refund. A surplus is either carried forward as a credit to the next year’s premiums or a check is issued. Additionally, to receive your refund, you could be required to renew your contract with the carrier.
Individual Coverage Health Reimbursement Arrangement (ICHRA)
ICHRA (ick-rah) is an evolution of QSEHRA, another HRA. Both plans are individual healthcare plans where employers make a tax-free reimbursement to their employees’ premiums. Employees can pick their plan and carrier, and the employer contributes monthly to the individual’s plan. There are many administrators of ICHRA plans including Gravie and Ameriflex.
ICHRA may be a budget-friendly option for employers who want to provide health insurance to meet ACA requirements. The employer removes their involvement in administration, which can be helpful for small senior care and disability service organizations. If the workforce includes a high claim population, the employer can avoid large annual increases and employees can find a plan that suits their needs and budget.
However, ICHRA plans can be confusing and frustrating for employees. We’ve found that most employees do not want to sift through a selection of healthcare plans. ICHRA plans may have high deductibles and are often age banded, which can be expensive for older employees and families. Additionally, employees cannot receive administrative assistance on their plan from the employer or a professional employer organization (PEO), like Procare HR. And when employment ends, the employee bears the burden of paying full price or terminating the plan altogether.
Minimum Essential Coverage (MEC) Plan
MEC plans meet ACA requirements but only provide preventative care coverage. MEC plans do not provide coverage for emergencies, which you could argue is the main benefit of health insurance. When a medical emergency does occur, it could put your employee in extreme debt and possibly bankruptcy, which would not encourage a positive work culture or retention. Make sure you are clear to employees that they may want to add a supplemental insurance plan that would cover medical emergencies.
MEC is recommended for care organizations that cannot afford a major medical plan. When possible, the HR experts at Procare HR recommend other plan options.
Supplemental Insurance Options
To stand out as an employer, we recommend adding voluntary supplemental benefits. This gives employees an ala carte of benefits on top of their healthcare coverage that further support their needs.
Supplemental benefits are voluntary benefits, meaning they are above and beyond ACA-compliant benefits. Supplemental medical benefits include hospital indemnity, voluntary accident, critical illness, and GAP supplements. Employees appreciate voluntary benefits such as short and long-term disability insurance as well as life insurance. Employers can provide these benefits or require employees to elect and contribute to the plans.
Telemedicine Benefits and On-Demand Primary Care
Telemedicine and virtual healthcare options have become very popular since the COVID-19 pandemic. Besides being an affordable option for employers, telemedicine and on-demand primary care address care for common ailments. At Procare HR, we recommend telemedicine add-ons for mental healthcare, as more counselors are available via virtual visits. Especially for frontline workers, expanding access to mental healthcare services can help an employer stand out from competing employers. Employees in rural areas where access to clinics is limited will also benefit.
Telemedicine benefits are cost-effective and provide employees easy access to treatment for colds or other common ailments. It’s important to remember that these options do not provide any emergency care.
Master Medical Plans through a PEO
A strategic option benefiting many care providers is leveraging Master Medical Plans through a professional employer organization (PEO). A master medical plan is a custom health insurance policy designed to improve the cost and quality of insurance coverage to employees. By working with a PEO, you legally enter a co-employment partnership, and your employees are employed under the PEO’s federal employer identification number (FEIN). When your employees are pooled with thousands of others in a network, you leverage buying power to get discounted health insurance rates and stable coverage options for health insurance and other benefits. In other words, you get high-value benefits at lower costs.
Beyond receiving other HR administrative benefits such as payroll, workers’ compensation management, HR consulting, risk and compliance management, and more, companies can take advantage of aggregate purchasing in a Master Medical Plan. PEOs are the only outsourced HR partner that can create master medical plans.
Procare HR Benefits Coordinators leverage their unrivaled experience and network with over 13,000 employees to get you the lowest rates. When you work with Procare HR, you offer your employees access to healthcare and benefits that rival Fortune 500 companies. Plus, you don’t have to review health insurance plans every year at open enrollment – our team of benefits experts takes care of that for you.
We’re Here to Help
At Procare HR, we have benefit experts on staff to work through health insurance plan options with you, navigate the nuances of broker relationships, ensure ACA compliance, and support negotiation and quoting. We handle the time-consuming elements of sorting and selecting healthcare solutions, so you do not have to.
What is more, we keep up with changes in insurance and regulation. We closely monitor the industry and track different trends and legislation that impacts health insurance options.
We are dedicated to providing the best possible advice as you navigate the complex nature of the healthcare system.
Overwhelmed by open enrollment? With our benefits administration service, Procare HR can help you make the selection and annual re-enrollment process a positive experience. Reach out to us today – let’s connect!
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