Choosing group health plans is arguably one of the most crucial decisions an employer has to make. The right insurance plan guarantees the employees’ health and well-being, increases employee satisfaction and productivity, and helps establish a strong company culture.
But, many businesses, particularly small and medium-sized ones, tend to make serious missteps that can become financially burdensome, create employee discontentment, and create legal issues. By knowing these pitfalls, employers can avoid detrimental decisions for them and their employees. Here are the eight key mistakes to never make when selecting a group health plan.
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Not Identifying Gaps in Employee Requirements
One of the most common errors employers make is picking a group health plan without knowing how it would cater to their employees’ needs. Employees have varying health requirements which stem from their age, lifestyle, any pre existing illnesses, and number of overall family members. Those plans that work best for a certain group of employees won’t be feasible for others, so employers should always conduct surveys or focus group discussions beforehand to gather useful information to understand the healthcare needs of their employees.
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Missing out on the Total Cost of Coverage
Employers often look only at the monthly premium of health plans. While premium costs matter, they do not reflect the overall financial burden on the business or its employees. The total affordability of a healthcare plan also includes deductibles, copayments, maximum out-of-pocket expenses, and costs for prescription drugs.
Employees enrolled in a low-premium plan may be less satisfied and stressed financially due to higher out-of-pocket costs. Employers should examine all costs to guarantee the sustainability of the plan for the company and the employees.
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Provider Networks are Missing
An easily avoidable mistake is overlooking the provider network with a group health plan. Employees need trusted healthcare providers to access easily; a restrictive network makes this difficult.
Employees might be unable to receive care or are forced to pay high out-of-network costs if a plan is limited to a couple of in-network doctors or hospitals. Employers need to ensure that the plan has a broad and established network that meets the region and healthcare needs of employees.
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Ignoring Plan Adaptability and Personalization
One major blunder employers make is choosing a rigid, one-size-fits-all approach that fails to meet the varied needs of the employees. Some employees may want extensive coverage, while others may opt for limited coverage at a lower cost.
Further employees can be empowered by offering multiple plans to choose from, flexible spending accounts (FSAs), or health savings accounts (HSAs). Companies should seek plans that provide them with options that best fit different health and monetary requirements.
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Failing To Adhere To Legal and Compliance Standards
Ignoring statutes can have serious consequences ranging from extreme fines to copious legal hazards. The employers must ensure that their group health plan complies with notoriously known ACA, ERISA, and other federal and state laws.
Non-compliance leads to litigation, incessant auditing, and fines. Legal and insurance experts would assist a business in navigating through complicated healthcare regulations and would easily help prevent costly mistakes.
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Neglecting Proper Training and Communication Strategies
In fact, even the most lucrative health insurance plans offer minimal value when employees fail to properly utilize them. Most employees face difficulties with health insurance vocabulary, benefits, and processes.
Therefore, employers must continuously inform employees about all available options regarding the plans selected, enrollment dates, and who bears what costs. These functions can be performed using group meetings, publications, and even personal interviews, which will assist employees in making more knowledgeable decisions regarding their healthcare needs.
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Selecting a Plan Only Because It Is the Cheapest Option Available
Every business has to operate within budgetary constraints. However, making cost the only decision factor can be detrimental to the company. Low-cost options generally have increased deductibles, decreased benefits, and a limited list of providers.
These factors often lead to frustration, limited access, and higher turnover ratios. Employers have to find a middle ground between affordability and quality to be able to allow the employees’ health care to be taken care of and still allow the company to be financially stable.
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Failing To Modify and Optimize the Plan Each Year
Most employers choose a group health plan and do not change it for many years. There is often a lack of proper evaluation of the plan’s effectiveness throughout its course. Employee requirements, healthcare pricing, and insurance policies undergo transformations over duration.
Outdated plans do not tend to yield the greatest coverage nor do they provide value. Employers ought to set aside time every year to examine and modify their health plans based on employee surveys to formulate the most useful benefits for them.
Conclusion
Employers must strategically choose a cost-effective group health plan that is beneficial to employee welfare and can improve overall business production. Varied employee needs, healthcare costs, provider networks, and physician regulations must all be followed without neglecting any single factor.
Ensuring most of these provide benefits and coverage towards the company’s goal, is where the employer’s focus needs to shift towards. Setting thoughtful objectives, involving employees, and reviewing the plans consistently will enable employers to achieve greater ROI while simultaneously adding value to their employees.
Disclaimer: MPB.Health memberships are a non-insurance solution designed to provide access to healthcare services. To determine if this aligns with your specific needs, we recommend consulting a certified expert advisor.
