Beyond Premiums: How to Vet Health Insurance Carriers
If you’ve ever shopped for a small group health plan, you know how difficult it can be to discern the differences between carriers. Oftentimes, the same type of plan from two different carriers will look really similar, even when it comes to premiums. There might be a few dollars saved here or there, but you’re basically paying the same amount for the same type of plan.
And if two plans have wildly different costs, don’t just go with the cheaper option. There’s probably a reason for that, and it may end up costing you more in the long run.
So, how are you supposed to choose between carriers?
Assuming your workforce is in a metropolitan area where there’s more than one option (a shrinking and unfortunate reality, according to this American Medical Association study), you’ll want to consider the following factors before choosing the right carrier for your small group health insurance plan.
Administrative ease: When vetting small group health insurance plans, most employers look closely at premium costs and provider networks, but administrative ease is often overlooked in the initial vetting of a carrier, says Lisa McMurtry, XMI director of benefits. But if your company is in high-growth mode, administrative ease is a must. Look for a carrier that assigns your company an implementation specialist, at least initially, as well as a designated account representative on an ongoing basis. Larger employers will want robust reporting capabilities, regular utilization reviews and access to claims data. A carrier that can’t check these boxes will end up costing you precious resources.
Technology: Closely related to administrative ease is the carrier’s technology capabilities. Unless you like shuffling papers, look for a carrier with a robust online eligibility portal, the ability to accept electronic eligibility, and an easy-to-use member portal (bonus points if your employees can access it on their mobile devices). McMurtry says most carriers should let you demo their platforms before signing on. Take advantage of this to experience firsthand their ease of use.
Network size and provider accessibility: If there is a large discrepancy in premiums between two plans of the same type, beware—that’s usually a sign of a narrow network. Depending on the demographics of your workforce and where they’re located, that may not be a problem. But choosing a plan with a narrow network may end up costing workers—and you—in the long run.
When vetting carriers, find out which health systems are in network, whether the plan covers a broad geographic area (an important consideration if you have a multi-state workforce), and how many primary care and specialty care service providers participate in the network.
Flexible plan design: Today’s multigenerational workforce means that health insurance needs can vary widely from one employee to the next. Should you choose a plan for the oldest employee or the youngest? Maybe you don’t have to choose. Many of today’s carriers offer flexible plan designs that can help you strike the right balance between your company’s coverage needs with the ever-present goal of controlling costs.
Customer satisfaction: If you’ve already considered all the above factors and still haven’t identified a clear winner for your small group health insurance plan, take a look at customer satisfaction. This does not mean relying on individual reviews of carriers, however. “They are highly dependent on very personal circumstances, and they are overwhelmingly negative across the board,” explains Saundra Latham on The Simple Dollar.
Instead, look for resources that can give you a higher-level look at customer satisfaction. The J.D. Power 2018 Member Health Plan Study is a good place to start.
There’s a lot to consider when choosing a carrier for your small group health insurance plan, but you don’t have to go it alone. “A good broker will be very knowledgeable about each carrier’s pros and cons and should be able to provide the appropriate consultation,” McMurtry says.
Need help vetting carriers for your small group health insurance plan? XMI can help. As your human resources outsourcing partner, we can guide you through the selection process to find the right plan and carrier for your unique needs.