Valuable Information

Considering Changing Health Plans? Start by Evaluating Current Plan

Though medical cost increases have slowed somewhat (averaging 7.5% in 2004, down from double-digit increases in the preceding three years, according to a survey from Mercer Human Resources Consulting), this rate of increase is enough to cause an employer to question whether it’s getting its money’s worth out of its current health plan. This worry, along with the desire to secure quality coverage for employees, can prompt an employer to consider shopping around for a new health plan, or new health plan carrier.

An initial question to ask is how the current health plan is performing. Have employees voiced concerns or complaints about the plan’s provider network or coverage provisions? What type of feedback have employees provided about the carrier’s customer service and promptness and accuracy of claims payment? How have premium costs increased, compared with the expectations you had when first contracting with the carrier?

Another consideration is whether the plan’s design and features fit your long-term benefits strategies. For example, if you are considering moving toward a consumer-directed approach to health care, does the plan design support this? Does the carrier offer high deductible health plan (HDHP) and Health Savings Account (HSA) products, along with health education and decision-making support tools?

If the answers to these questions indicate that a search for a new plan or carrier should be undertaken, research is key to finding the right replacement. Among the issues to consider in evaluating options include the following—

• the quality and range of the provider network, including access to specialists and the discounts applied for network use;
• the presence of disease management programs for chronic conditions and case management programs for catastrophic illnesses and events, both of which can have a huge impact on a plan’s claims costs;
• the plan’s premium cost relative to its co-payment/co-insurance/deductible levels, and how these fit with your goals for balancing the company’s and employees’ financial contributions to coverage;
• whether the plan has sought and received accreditation from any of the national health plan accreditation organizations (e.g., URAC and the National Committee for Quality Assurance);
• the carrier’s financial strength, record of complaints, and presence in your company’s market segment (e.g., small employer market, association/nonprofit market);
• the carrier’s reputation for customer service;
• the carrier’s use of technology for employee self-service (e.g., can employees check on the status of claims or find information about plan provisions on their own? can they readily locate up-to-date provider lists?);
• the extent to which the carrier uses technology to simplify any employer administrative tasks, and to enable the employer to identify and understand utilization patterns and cost-drivers; and
• the carrier’s loss ratio, fees charged for administration, and fee guarantees.

As your broker we can help you organize, prioritize, and evaluate the information that is critical to making the best choice for your company. The large investment that most companies and employees make for health care, and the importance of quality results, makes a careful search worthwhile.