The cost of health insurance increases every
year – in some cases, 30 percent or higher,
depending on your group. Most nonprofit
employers want to provide this important
benefit to their employees but are finding it
difficult to balance the increased cost to
operate vs. the cost of programs. Is the cost of
the health insurance policy the only thing to
consider? What other elements of a proposed
plan are important?
Legislation in Colorado passed over ten years ago tried to standardize the process and help the consumer compare plans. The Standard HMO and Basic HMO were instituted as “guaranteed issue plans” (policy is issued without medical screening), and all insurance companies still use these plans. A template listing a menu of coverage options, such as deductible, physician co-pay, hospital co-pay, drug co-pays, etc., is still in use. The consumer can compare the differences in plan coverage and price by looking at quotes from various companies. Most carriers have adopted a wide range of plan options to try to meet the needs of consumers.
Consumer-driven health care is the trend. Ten years ago, employers purchased HMO policies. The employee paid a small amount (co-pay) to visit the doctor or purchase drugs. The cost of health care was unknown to most employees because they didn’t see the bills. The concept behind consumer-driven plans is that consumers will be more careful with their health care dollars when they know the cost involved. Consumer-driven plans have a high deductible – $2,000 or higher – and the employee pays those amounts. The insurance company sends an Explanation of Benefits (EOB) to the employee showing the cost for a procedure and the amount to be paid. Some employers set up a Health Savings Account to allow the employee to save money on a pretax basis to pay the deductible.
When should you shop?
Health insurance policies are written for one year, and the cost and benefits provided are guaranteed for one year. However, you may shop at any time because the premium is paid monthly. If your circumstances change and you need to change your health policy, there is no financial penalty to do so. But remember, the insurance company providing coverage for your employees will require a written notice of cancellation, and time frames may vary. Check with your agent for specific cancellation guidelines.
A good insurance agent will act as your advocate with the insurance company and advise you of the rules you need to follow. This agent is knowledgeable about the products available and can help you decide which plan is best for your employees. He or she also will provide ongoing support and assistance with questions or administrative issues.
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Vallory McPherson, Insurance Consultant–Benefits, Nonprofit Resources, Inc. |
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What is the shopping process?
You may think of your insurance agent as your “personal shopper.” When helping you shop for health insurance, I will follow these steps to ensure your needs are met:
- I will gather pertinent information about your organization, either by personal appointment or conversing over the phone. My objective in this step is to fully understand your insurance needs and your goals as a Colorado nonprofit.
- After concluding the information analysis, I will explain the benefits of doing business with Nonprofit Resources.
- In my capacity as agent, I have access to all Colorado insurance companies and their programs. I will provide you with insurance quotes in a clear and direct format using a side-by-side price-andcoverage comparison. This sheet presents the information in a quick and easy-to-understand format without being overwhelming.
- I will answer your questions, discuss with you the pros and cons of each plan, and talk about the reputations of pertinent carriers.
- Once you select a plan, I will assist you with the enrollment process. I will meet with your employees to review the new plan and answer their questions related to the enrollment application. The forms will be submitted to the carrier, and I will follow up to be sure the policy is issued.
- After the policy is issued, your account manager (one of my colleagues at Nonprofit Resources) will take over to answer questions and help with the renewal of the policy.
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