What to Look for Before Signing a Group Health Plan Contract
To get the best benefit plan it’s important to know your options.
Most contracts for group health plans are standard and non-negotiable. However, a small portion of every contract is open for negotiation. It’s important that you understand your options so you and your employees aren’t surprised by the kind of benefits they will or won’t receive.
In addition, keep in mind that health plans may change from year to year as the federal government implements new rules and regulations.
Medical Benefits
Determine what you and your employees will be required to pay in monthly premiums. If you decide that the premiums are too high, you may be able to make some adjustments to the contract to bring costs down, such as including a clause requiring employees to purchase generic medications.
The deductible is what a plan member will pay before the insurance begins covering costs. According to the Kaiser Family Foundation’s annual employer health plan survey this year, deductibles have increased a whopping 255% just in the last decade. While it can be tempting to choose a high deductible plan to keep monthly premiums down, you should make sure the deductible is not so high that employees are discouraged from obtaining the insurance benefits.
The Affordable Care Act does not let you put a monetary limit on qualified benefits, but it does allow you to limit the frequency of benefits. For example, you might limit the number of chiropractor visits an employee can make. These kinds of limitations can help keep your plan’s costs down.
Most contracts allow you to choose to be in or out of a network — with the understanding that in-network charges are usually lower, because the carrier has negotiated discounts with the various service providers. If you choose in-network coverage and there is a preferred hospital in your area, make sure it’s covered in the plan.
Also, be aware of a new trend regarding networks. Some insurers now offer multiple tiers of preferred providers within a network. A member might pay $20 copay for a provider in Tier 1, but $35 for a provider in Tier 2. Although it’s a way to offer more choices, it can be confusing for you and your employees.
Wellness programs are becoming more popular because in many instances they’ve been effective at lowering or controlling health care costs. If you don’t offer a wellness program, check to see if your insurance carrier provides one.
Pharmacy Visits
Many contracts bundle in pharmacy contracts, so you don’t always have choices here. You will have more leeway if you have a self-funded plan. Here are some options to consider if you can design your own pharmacy contract:
- Require step therapy where less expensive drugs must be tried first
- Remove or re-tier certain drugs that have recently spiked in price
- Re-tier expensive drugs to the higher co-pay or add coinsurance tiers
- Require mandatory generic drug usage when available and consistent with doctor’s recommendation
- Provide access to designated pharmacies for certain drugs where deeper discounts are applied
- Require the purchase of maintenance medications through mail order instead of a retail pharmacy.
Administration
Does your plan year start in January or at another time of the year? Remind your employees if their deductibles are tracked against the plan year and reset at the beginning of the plan year — which isn’t necessarily the start of the calendar year.
Confused? Don’t Panic
It can be difficult guessing what type of coverage your employees want and need and how much these choices will cost you. Fortunately, we can guide you through the process and help you to make the best decisions for you and your employees. We look forward to hearing from you.
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