Choosing a health insurance plan for you and your employees is one of the most important things you can do for your business. There is a broad array of products offered in New Hampshire and the choices can often be confusing.
Below is a list of ten questions that you are encouraged to ask your health insurance broker or purchasing director. The questions are primarily focused on two areas: benefits and costs of the plan offerings.
Ten Questions To Ask Your Insurance Broker If You Are A Small Business Owner
- What are the differences in benefits between the different insurance plans being offered to me (HMO, PPO, POS, Indemnity, HSA, Consumer-Driven)?
- Does the plan exclude any treatments or medications?
- What are the premium costs to me and my employees for single, two-person, and family coverage?
- What are the out-of-pocket costs (co-payments, coinsurances, deductibles, maximums) to me and my employees?
- What is the maximum amount I want my employees to have to pay out-of-pocket, including premium contribution and benefit costs?
- Are my employees; primary care and specialist providers in the plan's provider network?
- What hospitals are in the plan's provider network?
- Are there any waiting periods for coverage and does the plan have any pre-existing condition limitations?
- What drugs are in formulary?
- What type of coverage is available for my retiring employees?
Each insurance plan offering has its own set of benefits. Benefits are the details surrounding what the insurance plan covers and does not cover, as well as what additional costs you need to pay when seeking medical or other services. Examples of benefits include: primary care physician office visit co-payment, specialty care physician office visit co-payment, inpatient hospital services, emergency room co-payment, and pharmacy benefits. To find out what benefits your plan offers, contact your broker or your health insurance company directly.
As part of your benefits coverage, it is common for an insurance company to exclude certain benefits or procedures. Common exclusions include premium costs.
Premium costs are paid typically on a monthly basis by your employer to the insurance company for your insurance coverage. Some employers pay 100% of the premium costs for their employees, but the majority of employers ask their employees to pay a portion (10-50% typically) of the premium cost and this is typically deducted from the employee’s paycheck.
The co-payment (co-pay) is a flat payment amount that you are responsible for at the time of service, and is usually a nominal fee paid toward the expense of providing care. Typically, co-pays are collected for physician visits, eye exams, pharmaceuticals, emergency room visits, and some diagnostic tests. They can range from $5.00-$40.00 for an office visit and up to several hundred dollars for an emergency room visit or a diagnostic test. This amount is paid each time you obtain a particular medical service. Pharmacy co-pays are often sold as "two tier" or "three tier" whereby you pay a different amount depending on whether it is a generic or non-generic drug. Co-payments apply toward meeting your deductible.
Coinsurance is the percentage of the amount paid to a health care provider that you are responsible for. For example, if your coinsurance is twenty percent, you will pay twenty percent of the total amount of the health care service that your health insurer pays the provider, and your health insurer will pay the remaining eighty percent. Often there is a maximum annual out-of-pocket expense in a policy. This amount, if provided for in your health insurance policy and commonly referred to as "out-of-pocket maximum," may limit your coinsurance payment. Coinsurance applies toward meeting your deductible.
The deductible is the amount you owe for health care services you receive during the year. Your health insurance company will not pay anything for your health care until you have paid the amount of your deductible. If your deductible is $500, you will need to pay $500 before the insurance company pays anything. What you pay toward your deductible is tracked from the first day your policy is in effect. If the policy starts January 1, nothing that you have paid prior to January 1 counts toward the $500 deductible. There are often different deductibles for different types of care. An example would be a $100 deductible on pharmacy services, or a separate deductible for lab and radiology services.
The amount you pay for the deductible does not reduce what you may owe for coinsurance or co-pays. Co-pays and coinsurance that are collected apply toward meeting your deductible.
Insurance companies negotiate discounts for services provided by doctors, hospitals, laboratories, pharmacies, and other medical services providers. Grouped together, these medical services providers form what is known as a provider network. The provider network in some insurance plans is limited; meaning that as a patient if you do not see a medical service provider in the provider network your visit or service may not be covered. Some plans do let you see providers outside of the provider network, but at a higher cost to you at the time of service. It is important to understand any limitations that your insurance coverage places regarding which providers you can and cannot see.
Waiting Periods for Coverage
When you are hired by an employer, there are often waiting periods for coverage before your coverage is in effect. For instance, if you are hired on September 15 and there is a thirty day waiting period for coverage and benefits begin on the first of the month, your benefits would be in effect on November 1. It is recommended that you ask your employer before you are hired when you coverage will take effect. This will allow you to determine if you need to find interim coverage.
Pre-Existing Condition Limitations
Some insurance policies have pre-existing condition limitations which is a list of services that will not be covered under your new insurance plan if there is evidence that you have been treated for one of these conditions in the past.
A formulary is a list of drugs that will be paid for by your insurance. Typically a formulary is offered as a two-tier or three-tier formulary whereby you pay a different co-payment amount depending on whether the drug is a generic or a brand name drug and whether it is in or out of the approved list of drugs in the formulary. Typically, you will find one co-payment for generic drugs, a higher co-payment for brand name preferred drugs, and an even higher co-payment for brand name non-preferred drugs.