Businesses looking to attract top talent to their ranks have many strategies they can implement, from providing competitive salaries to creating a positive workplace culture, a system of rewards and recognition, and more.
However, it’s worth keeping in mind that these days one of the most attractive employee perks that many workers look for is that of medical benefits. Workplace wellness and engagement is incredibly important, no matter what industry you’re in. If it’s time for your venture to put some health insurance in place, or to update your plan, read on for some tips you can follow.
Understand the Available Options
When considering implementing or updating the health insurance benefits you provide to your employees, one of the first steps to take is to make sure you understand your medical plan options properly. There are three main types of plans to choose from.
Defined Benefit Plan
For starters, there is what is known as a “defined benefit plan.” This is the standard type of employer-provided healthcare that you probably think of straight away. It involves organizations providing coverage to their workers through a single group plan. All employees have to utilize the services within the network on offer.
Defined Contribution Plan
Next, you can choose the “defined contribution plan.” This is different to the above plan in that it means that workers don’t have to take benefits from one specific plan, but can instead choose a plan that fits their requirements best out of a menu of options. Employers provide an allowance, and staff members decide what to use it on.
Lastly, there is also the option of using a professional employer organization (also known simply as a PEO). These setups tend to work well for smaller businesses wanting to provide plans but without having huge budgets to do so. If you decide to join a PEO the organization will basically co-opt your employees and provide the benefits, while you will typically receive discounted, large-group rates.
When looking at options, you should also understand some of the most widely-used acronyms. For example, you’ll need to know the different between an HMO, a PPO, and an EPO. HMO stands for a “health maintenance organization.” If you sign up to this style of cover, your costs will be lower, but your employees will have limited choices when it comes to the healthcare network they can select from. They will need to receive a referral from their main physician if they want to see a specialist.
PPO, on the other hand, stands for “preferred provider organization.” If joining up to this type of cover, your employees will have much more flexibility and will be able to visit any doctor they choose, either inside or outside the provider network. However, if they want to see a practitioner outside the network, patients will generally have to pay more. PPO premiums are also more costly for employers than those of HMOs.
An EPO is an “exclusive provider organization.” Opt for this and you’ll be getting a hybrid plan. This means that workers get access to a network of providers, like they would in an HMO, but they are not required to obtain a referral if they need to see a specialist.
Think About Your Specific Employees & Their Needs/Wants
As you can see from the above rundown, business owners have to weigh the costs of health insurance with how much flexibility they want to give their employees, and how long the venture may be able to sustain the fees. This decision should not be made without taking into consideration who exactly your employees are.
For example, analyze your workforce to see if it is mainly made up of healthy, young millennials who are less likely to use their insurance and who would want access to preventative healthcare if anything; or older workers who will be keen to gain access to a medical plan with a wide variety of comprehensive benefits.
Compare Plans to Find the Best Fit
Of course, once you have an idea of what to look for in a plan, it’s time to sit down and compare options closely. Since price will be a primary consideration here, make sure you look at both the costs involved to the business, but also those that the employees would have to potentially fork out. It is important to calculate whether the deductibles and co-insurance costs would actually exceed what a staff member could afford, based on his or her annual salary.
Don’t forget too, that you should look into exactly what coverage is provided by each plan, and if there are any restrictions involved. Read the fine print to see if coverage is limited to only certain conditions, or if only very low maximum payments will be available. As for restrictions, check to see if coverage would be severely reduced or completely unavailable if a worker has to seek hospital or other medical care in another state. If your employees travel regularly for work, these types of policies just wouldn’t be appropriate.