Tony Nefouse’s Complete Guide to Group Insurance: Request for Proposal
At this point, you are ready to start submitting proposals for group insurance.
First-year Benefit Offering:
If you are offering a group health plan for the very first time, there are multiple issues to be aware of. Hopefully, you have surveyed the current employees and know who is interested in electing coverage. As the owner, cost is always one of the most critical issues. It’s best to go into the process with some budget already established. If you are considering contributing the minimum employer contribution, that would be 50% of the employee premium. Currently the average employee only bonus is around $550 for a high deductible health plan. If you have seven employees that are interested, the company is going to be responsible for about $1,925 a month, plus the owner premiums if they are electing coverage. A lot of first-time benefit groups lose sight of their contributions and then can result in a messy situation.
Owner needs and employee needs:
Indiana small employers sometimes have a huge disconnect between the owner and employee when it comes to health insurance wants & needs. On most small group health plans (under ten lives) you don’t always have the option of offering multiple plans. This can create a problem where the owner of the company wants rich insurance benefits, but those plans can cost prohibitive to the employees. Considering that on plan designs is essential. A standard solution to this issue is going with a carrier that offers dual options plans like UnitedHealthcare for the small group industry.
If you oversee the insurance benefits for a start company, your background may be from a large group, and now all sudden you are in the small group arena with plans that are pre-designed. This can cause some frustration as you may want a particular type of plan design. If you are electing fully insured or self-funded be prepared that you may have to make some compromise on that first-year benefit offering. When it comes to long-term disability, it is difficult to get a plan for a 1st-year company, especially if you have less than ten employees. Most carriers require that the company has been in business for two years before they will offer coverage.
A good broker like Nefouse & Associates knows how to handle startup companies if you want a certain level of benefits, we can make it happen.
Replacing Current Insurance Benefits:
When we replace current benefits, a company should have a goal on both a price and benefit designs. On groups under 50 employees, a price goal can be 15%-30% reduction in premium. To obtain this kind of savings on the health plan, we usually must go through underwriting. Plan designs will also have an impact on price; a new traditional co-pay plan may have additional costs for or “specific co-pays” for outpatient and inpatient coverage. New group products may also feature split office visit copays for primary and specialist along with an additional pharmacy tier. All these new features shift the cost to the employee but have become a lever to try to control cost. On existing ancillary coverage (dental, vision, life, & disability) It’s relatively easy to create a bidding war from the carriers. Individual companies are very aggressive on these insurance benefits.
After a bit of thought, you are ready to send that census over to us Nefouse & Associates for proposals. After a conversation, we can determine what plans to present, that way we are not wasting time. The type of company, locations of employees, the age of employees, & insurance goals all plan a factor in what plans we will present.