Employee Health Insurance Guide

In any business, it is the employees that are central to the company’s development and the realization of its business objectives. What keeps the employees really happy, apart from a good salary and a competitive work environment, are employee benefits. In order to maintain a good workforce and increase productivity, various employee benefits have been introduced by employers. One such important benefit is employee health insurance.

In any business, it is the employees that are central to the company’s development and the realization of its business objectives. What keeps the employees really happy, apart from a good salary and a competitive work environment, are employee benefits. In order to maintain a good workforce and increase productivity, various employee benefits have been introduced by employers. One such important benefit is employee health insurance.

Most businesses offer health insurance to their employees at affordable rates, which otherwise is too expensive for individual purposes. Employee health insurance is a monetary agreement between the employer and the insurance provider. According to the terms of the contract, all medical expenses of an employee, including physician visits, surgical procedures, cost of medicines, and diagnostic tests, are paid by the insurance company through the employer.                                                         

Health insurance for employees depends on the level of coverage they require. The coverage is determined by the amount of premium and the employees’ healthcare needs. Employee health insurance is provided by both small businesses and large corporations to their full time and permanent employees. In today’s times, health insurance is one of the prime reasons that an employee stays with an organization. Therefore, as an employee, you should conduct thorough research and learn the ins and outs of the insurance plan provided by your employer. Ideally you should:

·        Understand the differences between an individual and an employee health insurance plan

·        Understand how health insurance works and how you contribute to it

·        Know what to expect in the enrollment process

·        Choose the most appropriate plan that suits you and your family’s needs

Employee Health Insurance: Legal Provisions

Most employers, by law, are not required to provide health insurance benefits to their employees. Although the practice of providing insurance to employees is fairly common, there are federal laws that protect employees from discrimination and abuse of rights. Once an employer decides to provide insurance benefits to an employee, the law requires him/her to adhere to federal guidelines prohibiting discrimination on the basis of the employee’s gender, race, age, national origin, religion, or disability.

Other acts, such as the Employee Retirement Income Security Act (ERISA), require employees to practice fair standards in employee health benefits and act in their best interests. Violation of ERISA can lead to serious consequences, from blacklisting of the company to legal action against the business owners, imprisonment and hefty fines.

[break]

Employer Healthcare

One of the benefits that employees enjoy most is the health insurance provided by their employers. Employer healthcare is a highly regulated domain and changes were made to the healthcare laws in February 2009 as part of the stimulus package passed by the Congress.
Employer Healthcare: ARRA
On February 2009, President Obama signed a stimulus bill called the American Recovery and Reinvestment Act of 2009 (ARRA) into law. ARRA contains several healthcare provisions including:

 
Subsidies on COBRA: Under COBRA, an individual retains healthcare coverage through a previous employer’s health insurance plan for up to 18 months by paying 102% of the cost of coverage. Under the ARRA, the Fed paid up to 65% of the premiums for employees who were laid off due to the recession between September 1, 2008 and December 31, 2009. The Congress also introduced a legislation to extend COBRA benefits under the ARRA plan.
Changes in HIPAA: The Health Insurance Portability and Accountability Act (HIPAA) was passed to address employees’ health insurance concerns and issues related to coverage. The ARRA expanded HIPAA’s scope to privacy and security regulations. Under the stimulus plan, all security breaches and abuse of health information rights are to be severely dealt with.

Employer Healthcare: Other Laws
The following are some of other laws affecting employer healthcare plans:
 
ERISA: The Employee Retirement Income Security Act (ERISA) protects employees from losing their pension due to reasons such as poor management. ERISA covers health insurance benefits as well.
FMLA: The Family and Medical Leave Act (FMLA) gives eligible employees the right to take up to 12 weeks of unpaid leave in a year to either take care of their newborn child or to place a child for adoption or foster care or to care for a child, spouse or parent with serious health problems or to treat one’s own serious health condition or to cover exigencies when their spouse, parent or child is summoned for active military duty.
Section 125 Plans: These plans allow employees to pick and choose benefits they can fund with pre-tax dollars. These plans are also termed as flexible spending accounts (FSAs) or health FSAs if there are health benefits offered.
 
Others: Other federal laws include the following:
·        Mental Health Parity and Addiction Equity Act
·        Medicare Modernization Act (MMA)
·        Uniformed Services Employment and Reemployment Rights Act (USERRA)
·        Age Discrimination in Employment Act (ADEA)
·        Americans with Disabilities Act (ADA)
 

[break]

Employer Health Insurance

If you are eligible for employee health benefits, check out your company’s employer health insurance options to see what costs you less. At your company’s open enrollment period, review the various insurance plans your employer offers. You can save a lot of money by opting for either an HMO or a PPO plan. Open enrollment offers you the flexibility to change your coverage from one plan to another, regardless of your medical condition. You have the option of increasing or decreasing your annual deductibles in an open enrollment. Most employers hold their open enrollment periods in fall every year to incorporate the changes in benefits from January 1 the following year. Once the enrollment period ends, your health coverage is locked in until the next yearly open enrollment period.
Employer Health Insurance: Make the Most of the Plans
·        Firstly, get to know of the plan inside out. Look closely at the eligibility and the payment terms. Find out what all is covered and how to file a claim. If you face difficulties in understanding your plan, contact your HR or benefits administrator.

·        While basic healthcare insurance gives you optimal coverage, some plans give you add on services like travel insurance and options for smaller or bigger deductibles. Compare the premium based on your individual needs and the anticipated pay out.
·        Thirdly, follow the rules of the plan you are subscribing to. For example, in case of eligibility on expenses, an x-ray differs greatly from contact lenses. Similarly, there are rules on how to claim as well. Know the documents you need to furnish and the deadline to file your claim.

·        Fourthly, make sure you claim every expense you are entitled to. Invest in an effective filing system that can organize your documents, bills, prescriptions, etc.
Some large employers operate their own health insurance plan, as opposed to purchasing coverage from an insurance company. Typically, it pays a third party, such as an insurance company to administer the plan that they have designed for their employees. The employer pays all the costs. While the company saves the profit margin that an insurance company builds into its premium, it exposes itself to greater risk in the event of that it needs to pay for more claims than were anticipated.
    •   
 

[break]

Employer Health Coverage

In the US, employers have always focused on the rising cost of providing health insurance benefits and taken steps to bring the costs down to manageable levels. But whatever reforms are put into practice, employers bear the cost of poor health in the form of absenteeism, sick days and reduced productivity at work. Some industry analysts say that US employers spend significantly more on the cost of poor health than they do on actual health benefits. Chronic conditions, such as diabetes, migraines, heart and respiratory problems, contribute significantly to the rising costs of poor health. Sweden, for example, in the 1980s, administered comprehensive health and wellness programs to increase employee attendance and productivity.
                                            

What is the best strategy for employers to address their health coverage issues? Employers have tried to bargain for maximum discounts from insurance providers, frequently switched plans in search of a better deal, and reduced the extent of coverage for their employees. Yet, health benefit costs have continued to increase. In such cases, employers need to focus on delivering healthcare in terms of value than on costs. Value is the outcome of the money spent. Costs include short term, immediate costs of treatment and long term, ongoing care of the employees.
Employer Health Coverage: Steps to Reduce Healthcare Costs
 
Firstly, in order to reduce healthcare costs, a company can take certain steps to improve the quality of healthcare. Factors such as better diagnosis, timely treatment, the right treatment for the right patient, etc. go a long way in ensuring that employees stay medically fit and contribute more to the eventual development of their organization. High quality of outcomes is the secret to success in healthcare.

 
Secondly, ongoing disease management, prevention and scheduled screening can dramatically improve the value of healthcare in order to prevent recurrences and setbacks.
 
Thirdly, to drive value across the employee healthcare spectrum is by retaining providers who have the scale, experience, teams and experience to achieve the desired results.
 
In light of the slowing economy and rising healthcare costs, it is high time that employers modify their own practices in order to maintain their workforce. The interest of both employers and employees is closely aligned around a common goal when it comes to healthcare coverage. The mantra for employers is to identify gaps in the process and address them proactively, and place quality above costs.
 

[break]

Employee Healthcare

Employee healthcare is one of the most important factors that contribute to an organization’s increased productivity and profits. Since employee healthcare is a prime objective in the industry, ensure that you do some ground work before buying a corporate health insurance plan for your employees.
Before buying an employee healthcare insurance plan, complete the following:

·        Ask your employees the kind of coverage they require, and subsequently weigh the pros and cons.
·        Ask your employees if they are happy with the current healthcare plan, how much premium they can afford, importance of prescription costs, regular medical checkups vis-à-vis emergency coverage, etc. Answers to these queries will help you in determining the exact plan required by your employees.
·        Ask your employees whether they would like to opt for a fee-for-service plan or a defined network plan. Also, ask them if they want to choose an HMO, PPO or POS service.
·        Find out the exact tax break amount
·        With so many options available in the market, shop around to shortlist the most suitable one. Also, ask other members of the business community what kind of healthcare plan they have for their employees.

·        Ensure that your employees are updated regarding the change of plan. Since most people are not inclined to reading the fine print, delegate this task to your HR department.
Employee Healthcare: Reduce Insurance Costs
Here are some tips to reduce healthcare insurance costs for your employees:
·        Offer your employees wellness incentives. Reward their efforts by paying bonuses and giving paid time offs to healthy employees and you will save a lot of money in the long run.
·        Charge a higher premium for employees who have bad health habits. For example, it may cause an initial uproar to charge a higher rate of insurance to smokers, but it might also motivate them to change their habits.
·        Start employee wellness programs like weight loss programs, quit smoking programs, monthly heart checkups and workshops on exercise and nutrition best practices. Motorola and Caterpillar have done it in the past with great success.
·        Educate your employees about healthy lifestyles and habits. If required, seek the services of a fitness or wellness consultant once a month and hold workshops. This would lower your healthcare costs to a great extent.
 

[break]

Employee Health Coverage

 The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) includes allows members of a company health plan to receive continued coverage at their own expense even if they have lost their employee health coverage. In other words, COBRA states that the employer must provide employees the right to continued coverage at the group rate for a certain period of time. The eligibility factors to qualify for COBRA are:

·        The employee must work in an organization that employs 20 or more full time employees

·        The employee must have quit his job voluntarily or have been terminated for reasons other than gross misconduct.

·        A spouse may be legally covered under the same circumstances as the employee or if the employee is covered under Medicare.

·        A dependent child may also be legally covered under the same circumstances as above.

COBRA also lays down some rules for employees. Some of the rules are:

·        Employers must ensure that the COBRA coverage available for eligible employees is consistent with that of the current employees. If the current employee benefits and health coverage change, COBRA changes correspondingly.

·        Employers are required to notify the employees of their right to coverage upon termination or similar qualifying event.
Employee Health Coverage: COBRA Pros and Cons

Pros

·        You can retain your existing coverage and enjoy the same benefits as employees who are still associated with your employer

·        Your employer handles all the administrative matters, reducing your need for paperwork

·        Your spouse and children are eligible under COBRA

·        It is suitable for families with ongoing medical needs, since the cost of COBRA is likely to be less than your current medical costs.

Cons

·        The cost of COBRA coverage is significantly higher than what you were paying earlier. You are likely to be charged 100% of the premium, which was partly borne by your employer previously.

·        COBRA coverage is temporary and usually lasts for 18 months. Eventually, you will have to search for other insurance options.

·        If you are in a startup with fewer than 20 employees, you are not eligible for COBRA.

·        If your ex-employer decides to drop a health insurance plan, you lose your COBRA coverage. Similarly, if your ex-employer switches to a different health insurance plan, you have no option but to follow suit.