Business Trends

The Dilemma of Dealing With Your Health Plan

by dennis kasselman

Many small business owners find that trying to deal with their health plan so it meets the needs of their employees -- and their budget -- can be about as simple as nailing Jell-O to a tree. It is not an easy task, but it can be done successfully if they take the same business approach to their health care needs that has made their businesses successful.

Today, 70% of Americans get health insurance through their employers. However, in a study conducted by FirstGuard Health Plan, we found that nearly 20 percent of those surveyed were not even sure what type of plan they had. That's like telling employees they have 20 days off a year, but never letting them know which days.

The study points out that many employers are paying/wasting good money for plans and benefits that they and their employees don't understand.

Managed care companies are feeling pressure to control costs and can move closer to that goal if they work closely with the small business owner. One only needs to look at the cost of pharmaceuticals today to realize the challenges.

The costs of pharmaceutical benefits are rising more than three times the cost of other medical services. In response to these rising costs, many benefit plans often require a subscriber to purchase generic drugs that are less expensive. Another benefit response requires additional cost sharing for persons choosing more expensive drugs. However, many drug companies continue to aim their advertising directly at consumers with the goal that people will "demand" these costly new drugs and where often there is no less costly generic equivalent.

In another area, new regulations often help groups and consumers, but have had the opposite effect on the cost of medical insurance. The Health Insurance Portability and Accountability Act of 1996 was designed to help groups and their workers keep health care coverage when moving from one job to another. The Act says that group health plans cannot deny an application for coverage based solely on a group's or person's health status.

HIPAA's rules normally apply to employer group health plans that have at least two participants who are current employees, including companies that are self-insured. While this act is good and helps limit the amount of initial rates and renewal rates for small groups, it means those risks -- with significant medical problems and associated higher costs -- must now be spread over a wider group of individuals, thus creating higher costs for everyone.

As both an employer and health care plan provider, I strongly suggest that you look beyond price when examining what health plan to offer your employees. You need to do more than compare rates because all health plans are not equal. Some health care plans offer great rates the first year, and after that double-digit rate increases are the norm. In addition, responsive service needs to be factored into your purchase decision.

In the confusing health care arena, most businesses retain agents or brokers to help them select a plan that suits their needs. If you retain a broker, demand that he/she provides information and is responsive to your needs. It is an agent's job to do the homework and recommend a plan that meets your needs and the needs of your employees.

Make certain agents prove their value by providing you answers to questions like: What businesses similar to mine do you insure? Can you provide references? Do these benefits meet the needs of my specific employee base? Who will resolve problems regarding plan services?

Once you have signed on with a managed care provider you should still remain active in the process and work closely with your health plan. Your employees and their families need to be aware when high-cost case problems arise such as high-risk pregnancies, asthma, diabetes and heart problems that they have a health plan that will work together to manage these situations.

Small business owners value their employees and want a plan that provides the best kind of focused care. This frequently involves having a plan that encourages annual physicals, immunizations and other programs. Employees want to feel like they have a plan that is concerned about their ongoing health needs, not just as insurance.

Working with your health plan provider to meet your needs and those of your employees can be accomplished. You simply need to apply the same sound business principles that you have used to make your business successful.

Dennis Kasselman is director of marketing and sales at FirstGuard Health Plan. Contact him at 816.922.7263 or e-mail at Dennis_Kasselman@firstguard.com.