Legitimate group insurance or bad deal?
March 17, 2011 12:33 PM   Subscribe

Health insurance filter: Is this really an employer group plan or something else? Should we be leery?

Insurance is scary. Please help us not make a huge mistake that we'll regret down the road!

My husband has been offered his dream job with a company, but negotiations have been rocky. We're finally learning details about the company benefits and there are a few things that send up red flags to me:

-The employer pays a low, flat $$/month to premiums, not on a percent basis, no matter what the premium is.
-Premiums are set on a per-individual basis; there's no company-wide rate. Individuals have to submit their name, DOB, residence for a premium estimate. Premium rates tend to vary widely from employee to employee. Does that mean rates can be jacked up over time?
-Spouses and children are not covered, but spouses can get their own seperate coverage under the group plan. (What?)
-For reference, the plan is UnitedHealthcare Difinity Choice Plus HSA. The deductible is high, deductible is voted on by employees every year, and it looks like absolutely nothing is covered until the deductible is met.
-Getting more details from the company is like pulling teeth.

All that equals us being extremely leery. It doesn't sound like any company plan I've had before--usually it's a flat premium for anyone in the company. We're doubly cautious because we both have significant health quirks (disabilities and chronic conditions) that have always given us LOTS trouble with underwriting for private insurance.

Biggest fear: We're fearful that the premiums will go crazy due to our personal health histories like an individual plan would.

We're also worried about the stability of such a plan and what the catches are with spouse coverage. We're both very risk-adverse when it comes to our health and want to have the fullest and safest protection possible so we can get the care when/if we need it.

It is a great job though, so are those really red flags or are we scared for nothing?
posted by ninjakins to Work & Money (11 answers total)
I hate a wiki answer, but it confirms what I thought. Group Insurance implicitly means everyone pays the same premium (viz dependent..)

So it sounds like a high deductible, health savings plan (the HSA, health savings account), but not group insurance. High deductible plans are sometimes called catastrophic insurance plans, ie the hit by a car/brain cancer/heart attack plans because they'll cover the majority of the costs in those cases. But break a finger, or slice a hand and need some stitches ? you'll pay out of pocket. Some of the out of pocket can be paid from the health savings plan part.

That the premiums aren't the same is unusual. How big is the company ? Are you sure the money the company provides goes to premiums and not the HSA ?

(and is it really a dream job if negotiations are rocky and getting information from people is pulling teeth ? At one job, even HR always deferred to the benefits web page, due to fear of giving "wrong" answers .. )
posted by k5.user at 12:51 PM on March 17, 2011

This sounds like an absolute scam to me. Or, more to the point, not a group plan at all. What I think the employer is doing is saying that they're willing to contribute $X amount to insurance, and that's it - no matter what. I mean, seriously - not offering coverage to dependents?

Your husband should demand a significant boost to his salary (maybe start negotiating at $20k extra) to fund the ridiculous FSA/HSA you're going to need to cover your health care costs. This, for me, would be a deal breaker. If they can't offer better insurance than this, then it's not such a dream job after all.

Try to figure out how much your doctor visits and such would really cost. (This is really hard to do.) That's how much extra salary they should have to pay your husband to tolerate such terrible health insurance.
posted by Citrus at 12:56 PM on March 17, 2011 [1 favorite]

I have that insurance and it is total crap.

With ours the only benefit is that they pay 100% of preventative care. Annual physicals, immunizations, and any vitamins are free. I don't think flu shots are covered, and I've never had the extra money lying around to test it. Calling to ask the insurance is a nightmare.

We have a $2500 deductible for care, another $2500 deductible for prescriptions, and another $2500 deductible for mental health benefits. If we chose a provider that they've approved we get a small discount on services. Once we meet the deductible the insurance is supposed to pay 95% of 'in network' costs. (Just FYI my husband's employer gives us an annual HSA of $1500.) We spend the extra money every month for the 'premium' plan.

One of the biggest pains of this insurance (aside from the price) is that apparently they pay their bills in their own sweet time. I can't find a hospital who will accept our insurance, and when I needed to get my daughter in to see a mental health professional I had to travel over 70 miles just because that was the only one who would take our insurance. I didn't like the doctor, so now I'm scrambling trying to figure out how to get her seen by somebody else without totally bankrupting us. I don't know what I would do if I was pregnant. I have a simple surgery coming up that we are literally saving up for.

This is of course my own personal experience, and yours might be better. (I doubt it.)
posted by TooFewShoes at 1:02 PM on March 17, 2011 [1 favorite]

I'll do this in bullet points, for clarity:

* UHC calls their Definity plans "consumer driven" The link to an employer is nominal, so I would not call this a traditional group plan. Rather, it's a way for the company to provide something to employees, but it acts more like an individual plan. I can't say I understand the ins and out of the employer-UHC link, but it does seem like by offering this kind of plan, the employer gets some sort of tax break. But it is not, in a traditional sense, a group plan.

* The HSA acronym stands for Health Savings Account. Essentially, the employee contributes money out of each paycheck towards this fund, which can then be applied to the high deductible. HSA's usually, if not always, have a high deductible, so this is a way for the employee to plan ahead for it, rather than be socked with a high deductible all at once. I linked to an FAQ that addresses how UHC's HSA works.

* Premiums can always go up, even with group plans. This plan may be more volatile, depending on what they are basing their premiums on. I would ask HR to clarify this.

* In my opinion (see below for why I have an opinion!) these kinds of plans are very close to not being much of a plan at all. If you go with this, please do a lot of homework regarding your particular conditions and how the plan treats them. Ask if you will have a pre-existing waiting period, ask if any medications you take are covered, etc. You should always do this, but with this kind of plan, the patient is expected to be extra-savvy.

I work at a large hospital and my job deals exclusively with health insurance, so I've been exposed to a lot of plans, and have also learned how to dig for this info.
posted by DrGirlfriend at 1:08 PM on March 17, 2011 [1 favorite]

High deductible plans are sometimes called catastrophic insurance plans, ie the hit by a car/brain cancer/heart attack plans because they'll cover the majority of the costs in those cases.

Well...In fact, almost all but the absolute best group plans carry high deductibles these days. A $2,500 individual deductible for a normal co-pay-based HMO plan isn't unusual. I've seen regular non-catastrophic plans with $5,000 individual deductibles, and even higher.

This plan sounds like an absolute waste. I'd see if I couldn't get a better deal on the open market. Maybe your employer would be willing to chip-in the same amount, too?
posted by Thorzdad at 1:13 PM on March 17, 2011

Side-remark: if you decide against this employer, let them know why.
posted by aramaic at 1:15 PM on March 17, 2011 [5 favorites]

My company tried to get us all on a high-deductible HSA this year. A few people sprung for it, and seem to like it so far. I went in the other direction, and demanded the full HMO, which I've personally been quite happy with (and it costs less!).

Of course, our HSA sounds a lot more generous and less sketchy than what you're being offered. The biggest deciding factor for the HSA should be your out-of-pocket maximum.

If you're healthy and don't use the doctor very much, the HSA was a good deal, because you got to roll over unspent money in your account to the next year, meaning that your rates could get very low if you are healthy for a few years in a row, put a comfortable amount of "padding" in the account, and slowly reduce your contributions to it if you think the balance is at a comfortable level. On the downside, you have to pay full rates to see a doctor whenever you get sick (giving you FAR less incentive to ever go see a doctor). On the bright side, if you got really sick, you'd end up paying a couple thousand (hopefully out of your HSA's carried-over balance) until the out-of-pocket maximum kicks in.

On our plan, that maximum was a bit high for my comfort (especially since you don't have ANY money in your HSA account to start out with), so I decided against it. It's a good plan if you're really healthy or really sick. Not so much for those of us who lie in between. Unlike an FSA, your HSA balance is not immediately available at the start of the calendar year, and gradually accumulates with each "deposit" from your paycheck.

I haven't had one of those "HMO horror stories," and have been really, really, ridiculously impressed by the quality of care (and ease of use) that Kaiser have given me since I started using them. I'd be very reluctant to go back to the "normal" healthcare system.
posted by schmod at 1:20 PM on March 17, 2011

Thank you so much for all the replies so far. We were really, really agonizing over this decision, but you guys made us feel much better about weighing our options!
posted by ninjakins at 4:46 PM on March 17, 2011

Schmod says: you got to roll over unspent money in your account to the next year,...

I am pretty sure that HSA money has to all be spent within the year and does not roll-over or accumulate from year to year. This is something that keeps me from getting involved in one. If I don't use it I lose it. Am I just confused?
posted by SLC Mom at 7:36 AM on March 18, 2011

@SLC Mom:
FSA = Use for the calendar year's costs, or forfeit the money back to your employer.
HSA = The money is yours, but you must spend it on medical costs. You roll over what you don't use to next year.
posted by Citrus at 7:59 AM on March 18, 2011

So desuka!
posted by SLC Mom at 4:43 PM on March 18, 2011

« Older what will they pay me to do?   |   What are you doing here, you're a title, titles... Newer »
This thread is closed to new comments.