So many options, how do I even begin to understand health insurance for our company's employees?
October 9, 2006 10:16 AM   Subscribe

Please explain health insurance to me from an employer's point of view!!!

I work for a commercial construction company with about 20 full-time employees. I asked my boss what he thought about providing health insurance for us, and he said "if you look into it I'd definitely consider it." So I requested quotes from a couple big companies (Aetna, BCBS, United HC) but I really don't understand all the information! I need someone to explain this to me in plain English, because when I look at the quotes I just see a jumble of numbers!

In particular, my questions are:

- In general, what should I be looking for in a plan?
- Some employees have kids - is the company obligated to provide coverage for them?
- Are there any fine print things I should look out for?
- Can an employee get coverage in this state (Louisiana) if their permanent residence is in another state?
- How much of a plan does an employer usually pay for? Does it matter to the insurance company who is paying for it?
posted by radioamy to Health & Fitness (7 answers total) 1 user marked this as a favorite
I'd recommend getting a broker. Answering those questions is exactly what they do for a living, and you'll have the benefit of local experience (as opposed to the MeFi three-answers-for-every-state solution). Your employer almost certainly has a broker handling some P&C lines and they'll either have someone in house who can do Life and Health, or can recommend someone.

Keep in mind that even if you get these questions answered to your satisfaction this year, you'll have to do the same thing every year at renewal. It's good to have options instead of just taking whatever renewal you're given.
posted by MarkAnd at 10:28 AM on October 9, 2006 [1 favorite]

Yep, I'd call a local insurance agent that specializes in small businesses and work with him or her. It won't cost you anything - and it will save you time and money. As a small company, you may be eligible for certain state programs that make health insurance more affordable - if your state offers such things. The agent will know.
posted by COD at 10:37 AM on October 9, 2006

In the absence of a labor contract, management usually has the right to determine benefit levels, who participates, extent of employee participation in costs, etc. There are probably certain non discrimination considerations with which you must comply. I completely concur with the previous posters. Find a reputable broker who works with small business and has access to bids from several insurers. It will usually be of no cost to you but he/she will be paid by thesuccessful bidder. No one does that much work for free. However, this is standard practice and not considered unethical. You can ask the broker to disclose his commision (s) and make sure he is not steering you to the plan with the best payment to him/her. An option is to negotiate with the broker to represent only your interest--pay him/her a consultanting fee--and have them agree in writing to not take a comission from the insurance company. Given the size of your company the latter is probably not necessary. Good Luck and it is complicated.
posted by rmhsinc at 11:04 AM on October 9, 2006

Agree with the advice to see a broker.

Concerning commissions, insurance brokers are heavily regulated and the broker's fee is likely to be the same regardless of which provider you go with. Even more so since the Spitzer affair, brokers, underwriters and providers have been trying hard not to appear to be doing anything wrong, so I wouldn't worry too much about having to scrutinize the broker's practices.
posted by randomstriker at 11:59 AM on October 9, 2006

The company is under no obligation to provide insurance for anyone, unless your state laws say otherwise. That means the company can offer insurance at whatever level it wants. The Company could pay for all of it, none of it, or something in the middle. The company can also decide how to handle families - at my employer, partners get none of their insurance paid for, associates get 49%, and secretaries/staff get 100% - but that's just for individuals. For family coverage, it's slightly different.

My husband, he pays 50% for his own coverage, but for some reason, when a spouse doesn't have insurance, or has to pay 50% or more, the spouse is covered for free.

Basically, this is just to say there is a ton of options. Get a broker :)
posted by dpx.mfx at 12:31 PM on October 9, 2006

In addition to calling brokers, call every construction trade association with which your company is, or could become, associated.

Because construction companies often have small office and management staffs, and have union plans covering their tradesmen and laborers, associations often sponsor what are called "multi-employer plans" which offer far better rates than those that a very small employer can negotiate for itself: thousands of dollars a year per employee cheaper.

There's no legal obligation to offer spouse or children coverage, but depending on many factors you usually can't offer family coverage to one employee while withholding from another. You especially can't offer better benefits to higher paid employees (unless employees are taxed on the value of the benefits), but can sometimes offer better benefits to lower paid employees.
posted by MattD at 4:17 PM on October 9, 2006

I don't have any helpful advice, but I'd like to give a little perspective from the employees' point of view. My wife's employer provides 100% of individual coverage, but nothing for any additional coverage, meaning that people with families basically have their pay cut by up to $800/month if they are the sole insurance provider.

Might I suggest you go with a scheme where the employer pays (something like) 80% of all coverage, regardless of number of people covered. This means that the employer will pay more for those employees who do have a family, but it just seems more fair to me, and puts less of a burden on folks who could probably use the money.
posted by Rock Steady at 8:11 PM on October 9, 2006

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