The process of choosing the right health care plan can be a daunting task — especially for small businesses that might lack financial flexibility, time and resources.
A few simple steps, though, can help smaller companies craft a competitive benefit package without breaking the bank or tumbling into a legal pitfall, according to a recent online post by Business Insider.
When shopping for health insurance coverage, experts suggest that companies:
Examine all the options: Don’t just buy the cheapest plan, advises insurance consultant Dan Weedin. “As with any other insurance, don’t make your decision on price alone,” he said. “In insurance, you often get what you pay for, and that can be more expensive in the long run.” On the other hand, it’s best to make a budget and stick with it, according to entrepreneur and author Aimee Elizabeth. “If you don’t know your budget, you can easily end up with buyer’s remorse when you wind up buying a package that leaves you penniless,” Elizabeth said in the Business Insider post.
Check out tax-friendly accounts: Examine high-deductible health plans with health savings accounts, health reimbursement arrangements or flexible spending accounts, which may come with tax advantages that sweeten the value of the benefit, experts said.
Beware of unstable insurers: A recent court case highlights the need for employers to also be aware of the insurance carrier’s financial strength. CFO Magazine reports that International Schools Services (ISS), which provides services for international educational institutions, ran into trouble when claim checks from its insurer, AAUG Insurance Co., bounced.
Despite an order by the U.S. District Court in Florida, AAUG also failed to pay for a forensic accountant who was hired by ISS to look into the matter.
Although the court froze AAUG’s assets and left the door open for more penalties, the case certainly created a mess for ISS, said Elliott Kroll, an attorney representing the company.
“There is a risk for American businesses in finding a package that looks financially attractive with health insurers that aren’t as well known as the major ones,” Kroll told CFO. “And the more that companies deal with fringe players in the health care market, whose numbers I think will increase in the next few years, the more these types of situations will arise.”
To guard against this type of issue and to help secure the best plans, the experts cited in Business Insider offer one last, important tip:
Hire an experienced advisor: A knowledgeable consultant can walk you through the process of purchasing health care coverage and help you make the best choices.
Elizabeth noted that it’s important for employers to ask for referrals and to interview the advisor firm to make sure it’s a good fit.
“Explain what you need and why,” Elizabeth said. “See if he actually listens and understands, or if he rolls his eyes, interrupts you a lot and tries to shove his preconceived plan down your throat. You want the first guy, not the second.”