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Group Health Insurance Shopping Guidelines
for Small Business Owners.....
(To hear radio commercials to be aired on WHJJ
920-AM
beginning 10/23/06 -
Click Here)
If you own a business with 50 employees or less
and want to make sure
you are getting the BEST health insurance coverage for your business
for the lowest cost- especially if your business is in Rhode Island or
Massachusetts - both of which are severely legislatively challenged- (which
has a direct impact on insurance costs and availability). Keep the following
do's and don'ts in mind.
DO
- the health insurance shopping for your
business yourself or be involved in
every step as the more you contribute to
the premium cost, the less likely
you are to be shown all your best
alternatives and lowest priced options.
- make yourself
available to the insurance broker by providing your direct contact
info and home phone number to ensure you
get all the information about your options
from the broker directly. Don't make the
broker have to go through an employee.
- have the broker do
a cost benefit analysis of plans you are considering. False
information about what to look for in a
good health plan has resulted in most
businesses overpaying for coverage that is
not as good as it should be. The
analysis should include best case and worst
case scenarios and should include
all costs - not just premium costs. For
example, co-pays for prescriptions can add
up to thousands of dollars in out of pocket
costs. This needs to be factored in to
overall costs - just the way a deductible
does.
- look for a plan
that will provide the best PROTECTION in a worst case scenario.
You're goal should be to find a plan that
won't put your employees in a situation
where if they or a family member
should get really sick they won't end up having
to be responsible for thousands and
thousands of dollars in co-pays with no end
in sight. You want a plan that
eventually provides 100% protection for EVERYTHING
once a reasonable amount out of
pocket has been paid by the employee.
- look for a
national "A" rated health insurer. You wouldn't settled for anything less
from a life insurer or long term care
insurer. Also a national company gives you
greater portability if you should
relocate your business out of state.
- strongly consider
Health Savings Accounts (HSA) qualified high deductible
plans since they provide 100%
protection once the out of pocket responsibility is met.
as well as savings for retirement. In
Massachusetts and in Rhode Island generous
wellness benefits are included on a first
dollar basis meaning they are covered
100% whether the deductible is
satisfied or not. (They don't even require a co-pay
the way all the more expensive co-pay plans
do). They'll beat a co-pay plan every
time for real protection and isn't
that what you are looking for - especially in a worst
case scenario?
DON'T
- put and office
manager or human resources person in control of screening
health plans. The less employees are
required to contribute the greater the likelihood
the office manager will not let you in on
high deductible options that would truly provide the
best protection for employees at the lowest
cost. Even after the deductible is figured
in, high deductible plans, still cost less
- even to the employee - than co-pay plans. Office
managers often can't see this. For
example, look at the following family plan examples
below.
Current Co - Pay Plan
Most Sensible 100% Plan
$1200 / mo $14,400/yr premium
costs
$650 /mo - 7800/yr.premium costs
No deductible in-network
$4000 family deductible
Co-pays $15 O.V; $50 Urgent Care
Co-pays - 0
$100 - ER; $10/$25/$40 Rx
Annual
Tax savings potential $0
Tax savings potential in a 30% bracket
$1200/yr after making full HSA contribution
Best
case Scenario cost/yr :
Best case Scenario cost/yr
Usage: 4 annual
physicals -$15
Usage 4 annual physicals -covered 100$
co-pay each or $60
Total of premiums + co-pays :
Total of premiums - tax savings
Grand total best case
Scenario
$7800 - 1200 = $6600/year
$14,460/year
Both of the
above families of four received the same care but the business on the right save
HUGE
amounts as did the employee!
Now lets look at the above two plans to see
how they perform in a worst case scenario where
two of the members of the family are sick
and on prescription drugs that retail for $30,000 per
year combined. One person pays three $40
co-pays and the other pays five $40 co-pays every
month for a total of $320 per month in
prescription drug co-pays for the family or $3840 per year.
If we assume
that both families had their annual check ups for each of the 4 family members
and paid for the Rx costs the total cost of
healthcare for the families under the different plans
would look like this.
Worst Case Scenario cost/yr:
Worst Case Scenario cost/yr
Usage 4 physicals; $3840 in
Usage 4 Physicals and $30k
Rx co-pays
of Rx drugs
$14,460 (last year
prems.+ physical co-pays) $7800
prems + ($4000 ded -1200
+ 3840 (Rx-co-pays
+4000 deductible
$18,300
$11,800
-
0 tax savings
- 1200 tax savings
$18,300 total for the year
$10,600 total cost
Note: If the family with the co-pay
plan had greater medical expenses the cost could be much higher than the above
whereas since the plan on the right has 100% coverage built in for EVERYTHING,
the worst case scenario total cost can never be any greater than $10,600.
In both of the above cases if the employer pays
100% of the premiums, the employee has better coverage with the 100% plan as in
a good year the physicals would be covered 100% AND the employee would SAVE an
extra
$1200 in taxes that he or she would not be able to with the co-pay plan. In a
worst case scenario, the co-pay plan cost the employee $3900 in out of pocket
costs whereas with the sensible plan, the after tax out of pocket cost after the
$1200 tax savings is figured in is only $2800.
Ready to see what kind of savings your business
might qualify for? If so I will need:
- a complete census of your business including
employee's age and gender;
spouse age and number of children to be included on your plan
- a description of your current plan including
co-pay amounts. deductibles and
coinsurance and out of pocket maximum amounts if any
- your current premiums
- your anniversary date
- If you currently have a United Healthcare plan
and if you have fewer than 6 employees
insured on your plan (that represents 75% of eligible full time employees that
work 30 hours
or more and are not covered by other health insurance), I will need a letter
saying you
want me to be your broker.
- If you want to keep working with your broker
and you have 6 or more employees on your plan
I will need your broker to agree to split the commissions. I will show you
what will save
save you the most and get you set up with the best plan and your broker can
continue to handle
administrative work.I will help with any plan coverage and savings related
issues.
I look forward to working with all SERIOUS business owners who are
ready and willing to do what
it takes for you to get the BEST health insurance value and save the MOST
money - more than you've
ever dreamed possible. So DON'T WAIT! Why waste another dollar on needless
health insurance premiums? Give me a call today! ~
Emily Harding
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