Management Essentials

Time for bosses to renegotiate employee health insurance plans

New regulations mean employers will have to find new deals to keep staff coverage affordable.

By Farrell “Toby” Tyson, MD, FACS

Farrell C. Tyson, MD, FACS, is a refractive cataract/glaucoma eye surgeon at the Cape Coral Eye Center in Florida. He may be reached at tysonfc@hotmail.com.

It’s that time of year again for my practice: Time to renegotiate our employee health insurance. The Affordable Care Act (ACA) was supposed to lower the cost of health insurance and allow individuals to keep their insurance if they wanted to.

Well, I don’t think many medical professionals believed those promises, and now we are starting to see them broken. Health insurers are trying to increase premiums under the guise of complying with the ACA. This year, our premiums increased 35%, and even if we wanted to keep our old policy and pay an exorbitant rate hike, we couldn’t. The insurance company discontinued our plan.

RENEGOTIATING BEFORE YEAREND

This made it necessary to look at all possible health options. We normally renegotiate our health insurance in September for a policy year starting in October. We found that, even though most businesses plan on a calendar year, we’ve been able to get better rates before the end of the year.

The reason for this is the massive amount of applications insurance companies receive at the end of the year leaves them inundated and less likely to discuss individual plans. By mid-year or later, insurance companies have had a chance to catch their breath and actually work with you.

FINDING THE RIGHT BROKER

It doesn’t matter which insurance broker you choose. All brokers receive the same premium quotes. It comes down to which broker is going to provide the best service for your organization.

Look to see if most of their clients are small, medium or large employers. This gives you a good idea of their ability to service your needs. Also, the commission they charge is negotiable. Once you choose a broker, it is time to get bids from insurance companies.

PICKING A PLAN

Usually, you will get several options from competing companies. They will vary by deductibles, co-pays, HMO vs. PPO, and drug coverage.

This can lead to a myriad options. Over time, high-deductible plans have become more popular as most individuals in the workforce do not utilize their health insurance much.

This has led to a new market of insurance called gap insurance. Think of it as a co-insurance that helps cover the high deductible and out-of-pocket costs. A separate company usually provides this gap insurance, but it easily integrates with your plan. We found it more cost effective to offer a high-deductible plan with gap insurance than it was to offer a comparable plan with a low deductible. A good trend in the insurance industry is the ability to offer multiple plans to your staff, avoiding the one-size-fits-all plan.

Once you have decided on the level of coverage and the means of insurance, it is time to rebid the plans among the different companies. Through this process this year we were able to take what was going to be a 35% increase and turn it into a slight reduction in premiums while maintaining our benefits package. Hopefully, through thoughtful negotiation, your practice can achieve similar success in an ever-changing market. OM