When considering defined contribution health benefits, one of the first questions employers and employees ask is about the health insurance coverage they'll have access to. Will I have my same doctors? Will it cover my health conditions? Can I afford it? This article answers the top four health insurance related questions from employers on pure defined contribution health benefits.
With healthcare reform on the horizon, the cost of health care and health insurance is on everyone's mind. Health insurance is meant to protect us financially when we are sick or injured. It's estimated that 18.4 million Americans had an overnight hospital stay last year, with the average hospital stay five days. Here's an interesting infographic that shows the cost of a hospital stay by type of insurance, and without insurance. It also looks at the cost of various medical procedures with and without insurance.
Nonprofit organizations face important decisions about employee health benefits, especially as the Affordable Care Act (ACA) creates new regulations, and new opportunities, for employers. Just like for-profit employers, the key reason nonprofits offer health insurance is for recruiting and retention. And yet, many nonprofits have been priced-out of traditional group health insurance.
Many small business owners think that offering health insurance is beyond reach. But, with new options today it is easier than many small businesses think. The benefits of offering health insurance to employees are generally agreed upon:
Most employees greatly value health insurance. After all, medical care in the US is expensive. Having a baby costs between $30,000 and $50,000 on average, and so does a three-day hospital stay (averaging $15,000/day). Health insurance is a way to reduce those costs by sharing the risk with others, and health insurance gives you access to in-network pricing discounts.
Even though polls show the majority of Americans don't understand the inner workings or personal impact of health reform, most employees do believe one thing -- that health reform will increase how much they pay for health insurance over the next several years. And, a third believes the quality of their health care benefits will decline over the next three to five years. This is according to a recent nationwide survey of employees conducted by the National Business Group on Health (NBGH).
Many startup entrepreneurs feel daunted by the task of taking full responsibility for health insurance for themselves and their employees. The costs itself can be daunting, with average annual premiums of $5,884 for individual coverage and $16,351 for family coverage. Startups with limited capital may be tempted to forgo health insurance and pay the individual mandate fine. But, entrepreneurs are often more risk adverse than people think. After all, most entrepreneurs are invested personally in the startup. A trip to the ER or an expensive medical procedure, without insurance, can mean lights out for the business.
The National Committee for Quality Assurance (NCQA) evaluated 577 private (non-Medcaid or Medicare) health plans and ranked 484 of those based on clinical performance, member satisfaction, and NCQA Accreditation. On September 19, 2013 NCQA released their 2013-2014 rankings of the top private health insurance plans.
One of the goals of the Affordable Care Act (ACA) is to make shopping for and comparing health plans a more transparent and less complicated process. The online health exchanges, which opened for enrollment on October 1, 2013, attempt to make buying insurance as simple as buying a plane ticket. Enter some personal information, and the plans will be listed out for side-by-side comparison.
The health insurance tax subsidies offered through the public health insurance exchanges are one of the best kept secrets of the Affordable Care Act (ACA). However, even though the majority of Americans will be eligible for these discounts, those who make more than 400% of FPL will not (individuals earning over ~$46,000 or a family of four earning more than ~$94,200). If you're a business offering a "pure" defined contribution health plan, you may have employees in this situation. So, what can employees who are not eligible for the subsidies do to make sure they are getting the best deal on health insurance?
Disclaimer: The information provided on this website is general in nature and does not apply to any specific U.S. state except where noted. Health insurance regulations differ in each state. See a licensed agent for detailed information on your state. Zane Benefits, Inc. does not sell health insurance.