Cut Your Company’s Healthcare Costs: 7 Strategies That Almost Always Work

By Steve Dorfman

When times are lean, you have to find fat to cut — and sometimes it just can’t wait.

Precisely where you decide to cut will depend to some degree on your long-term strategy, and your broader vision for your company. No two firms are alike; you know better than anyone what yours can bear. But it’s no secret that healthcare is a perennial target for miserly executives.

There’s a catch, of course. Healthcare is an intensely personal benefit. It’s staggeringly complicated, too. Slash healthcare costs the wrong way and you could find yourself at the sharp end of an employee revolt. Even modest changes can adversely impact morale. It’s all about how you cut — and how well you communicate the new rules along the way.

These seven strategies for cutting healthcare costs work more often than not. Most are complementary, but you’ll want to evaluate your company’s needs — and its workforce’s — before making any front-facing moves that your employees are apt to notice in their paychecks or provider experience.

1. Get As Many Quotes As You Can

Your employees probably won’t notice this one — at least, not until their premiums change (hopefully for the better). You can sum it up in two simple words: “shop around.”

It’s virtually certain that numerous insurers offer group health insurance plans in your area. You will find a company willing to underwrite your team. The more quotes you source, the more accurately you’ll be able to budget for your employees’ health insurance — and the better equipped you’ll be to negotiate with insurers, should it come to that.

2. Increase Your Purchasing Power (Without Staffing Up)

Larger businesses benefit from innate purchasing power. Because they’re able to bring so many employees to the table, insurers are usually willing to cut them a break.

Smaller employers can’t rely on their heft alone. Good thing they’re not alone. By combining their purchasing power with other small businesses, they benefit from the same economies of scale as larger businesses without all the downsides of staffing up. (Self-employed folks —  companies of one — take advantage of this arrangement all the time.)

There’s no guarantee you’ll be able to find a group health insurance plan that meets your needs and budget. But there’s no harm in trying.

3. Hire Healthy

Take a detour to the seamy side of human resources and ogle the many permissible forms of employment discrimination.

 

“The law varies from state to state, and it’s absolutely crucial that you stay on the right side of it.” — Steve Dorfman

 

But there’s a good chance that it’s legal not to hire smokers (for example) in your jurisdiction. Hiring healthy candidates without engaging in illegal forms of employment discrimination (or terminating employees for no cause other than perceived unhealthiness) is an effective means of cutting healthcare costs.

4. Incentivize Employees to Make Healthy Decisions

Embed healthfulness in your company DNA with meaningful incentives for healthy decision-making. That might mean a “Biggest Loser” style competition, discounted gym memberships, or bonus compensation (whether financial or in-kind) for attendance at on-campus yoga classes.

5. Institute a Companywide Wellness Program

If you can make the numbers work — and you probably can, depending on how many employees you have to insure — consider going one step further and instituting an employee wellness plan. Just make sure your plan is actually producing the desired outcomes; if you’re throwing good money after bad, there’s no reason to continue.

6. Consider an HMO

Though they’re not without their drawbacks, HMOs can reduce per-patient costs for group buyers of any size. This is a change you’ll want to communicate to your employees, though, as HMOs tend to have narrower networks with fewer providers and more restrictive referral policies.

7. Look into Health Savings Accounts

Health savings accounts (HSAs) can’t completely replace traditional health insurance plans, but they can make up for higher deductibles and less generous coverages. Again, you’ll want to be transparent with your employees about what HSAs are and aren’t, what benefits they can realistically expect from their accounts, and what tradeoffs — if any — you’ll ask them to make on the insurance front.

Find a Health Insurance Partner

There’s no magic bullet to cut corporate healthcare costs. If there were, we’d have found it by now, and you’d have no need to read articles like this one when any number of other matters demand your attention.

That’s why it’s so important to have the right health insurance partner in your corner. You need someone you can trust to simplify the numbingly complicated range of health insurance choices at your disposal and provide honest advice about what your company actually needs to do right by its employees.

Steve Dorfman is the founder and current CEO of two Florida-based firms: Simple Health and Simple Insurance Leads.

Is That Plan Right for You? 8 Questions to Ask Prospective Health Insurers

By Steve Dorfman

If you feel like searching for health insurance is a full-time job, or that evaluating your plan options requires an advanced degree, you’re in good company. Health insurance is really, really complicated.

The good news: health insurance consumers have far more agency than they realize. As a consumer, your first line of defense against the inscrutable is your ability to ask questions — an ability that all of us share, no matter how credulous we might seem.

Before you purchase a new health insurance policy, you’ll want to give your querying muscles plenty of exercise. These eight questions should definitely be on your list, but there are plenty more worth vocalizing too.

 1. What Does the Network Look Like?

Healthcare.gov defines “network” as “the facilities, providers and suppliers your health insurer or plan has contracted with to provide health care services.”

 

“The bigger the network, the more healthcare choice you have. But, as is so often the case, bigger doesn’t always equate to better.” — Steve Dorfman

 

Your ideal network includes the primary care providers, specialists, and hospitals that you need to achieve optimal health outcomes.

2. What Plan Types Are Available?

WebMD notes that health insurance plans come in a variety of different types. Said types are distinct from coverage levels (see question #3).

Health insurance plan types include:

  • Health maintenance organizations (HMOs), which are built around primary care providers that refer patients out to specialists as necessary. HMOs have lower paperwork requirements than some other plan types, but they’re not ideal for customers who value expansive choice.
  • Preferred provider organizations (PPOs), which offer a bit more provider choice and don’t require referrals for patients to see specialists. PPOs impose relatively high out of network costs, so you’ll want to stay in-network if at all possible — yet another reason to ask question #1.
  • Exclusive provider organizations (EPOs), which are comparable to PPOs on but one crucial point: by definition, they provide no coverage for out of network visits. If you need to venture outside your EPO’s network, you’ll pay full provide for whatever services you procure.
  • Point of service plans (POSs), which combine the simplicity of HMOs with the flexibility of PPOs.
  • Catastrophic and high-deductible plans, which provide basic coverage and impose relatively high out of pocket costs for actual health services. These plans may work well for healthy individuals, self-employed people, and those seeking to bridge employment gaps.

3. What Coverage Levels Are Available?

Now, onto the metals. Each ACA-compliant plan is assigned a metal level that roughly corresponds to the generosity of its coverage. Metal levels range from bronze, which denotes more limited coverage with higher out of pocket costs; to platinum, which denotes more generous coverage with lower out of pocket costs. Premiums increase in direct proportion to coverage.

4. Do Your Plans Meet My Healthcare Needs?

Think that platinum plan is a slam dunk? Think again. If you’re a younger, healthier individual with a limited budget, you may be better served by a more affordable plan with lower coverage levels. Before you purchase a plan, you’ll need to dive into its features and benefits to determine whether it actually meets your healthcare needs — or whether it provides too much or too little coverage.

5. How Much Can I Expect to Pay Out of Pocket?

The budgeting fun never ends. Though metal levels provide some guidance as to your expected out of pocket costs, rough estimates are rough for a reason — they’re often wrong. And not all individual insurance plans have metal levels. You won’t know for sure whether you can truly afford a health insurance plan unless you ask this question directly.

6. Will I Have Any Control Over My Out of Pocket Costs?

This is another important question for cost-conscious consumers. (Aren’t we all?) There’s a surprising amount you can do to control out of pocket costs — see this helpful roundup by Cigna, a major insurer. Not all plans allow totally free reign on the cost control front, though: you can’t get around restrictive provider networks, for instance.

7. What Benefits Are Included?

This blunt little question seems too basic to waste an insurer’s time with, but plan benefits aren’t always apparent from plan documents — even those written in plain English. If an insurer wants your business, they’ll take the time to spell out plan benefits in detail.

8. Do Your Plans Have Any Restrictions on Pre-Existing Conditions?

Non-ACA-compliant plans don’t necessarily provide coverage for people with pre-existing conditions. If you’re worried that something in your medical history could cause trouble on the underwriting front, you’ll want to get assurances before you go through the trouble of applying.

Are you in the market for health insurance? What’s the most pressing question you’d like to ask prospective health insurers?

 

Steve Dorfman is the founder and current CEO of two Florida-based firms: Simple Health and Simple Insurance Leads.

7 Indispensable Insurance Resources for Your Next Job Change

By Steve Dorfman

Are you gearing up for a job change?

You’re not alone. Every year, millions of Americans voluntarily change employers. Millions more change jobs involuntarily. It’s a good idea to plan for the day when you’ll be forced to look for a new job, even if you can’t imagine yourself working for anyone else right now.

Prepping for a new job is a daunting task that presents a slew of logistical headaches.

 

“One issue that you absolutely can’t overlook — and should begin planning for at your earliest possible convenience — is health insurance.” — Steve Dorfman

 

Specifically, what you’ll do when your employer-sponsored health insurance plan is no longer available.

These seven indispensable insurance resources all have their place. Your next job search won’t demand all seven, but you’ll definitely want to know which to use before you have to scramble for coverage or information.

1. Healthcare.gov

Healthcare.gov is the public face of the Affordable Care Act, popularly known as Obamacare. If you’re looking for initial guidance about what to do, and when, during your job switch, it’s as good a place as any to start. Healthcare.gov also has a wealth of information about your various plan options, including the different plan types and levels (“metals”) available in your area. While you should always consult with a health insurance expert directly before making consequential decisions, Healthcare.gov is a great place to set your expectations and gather basic information.

2. Your State Health Insurance Marketplace

Not all states have health insurance marketplaces, but many do. (The Kentucky Health Benefit Exchange is a representative example.) State health insurance marketplaces are great places to find health insurance information (and plans) specific to your domicile. Again, they’re not necessarily one-stop shops — you’ll want to speak with a health insurance expert and look to other potential sources of health insurance in your state.

3. The Federal Health Insurance Marketplace

If your state doesn’t have its own health insurance marketplace, you can use the federal health insurance marketplace (accessible through Healthcare.gov) to find coverage. The process of actually sorting through different plans is quite confusing, so you’ll want to consult with an expert if you get stuck.

4. Coverage Under COBRA

Many job-changers choose to temporarily continue employer-sponsored coverage under COBRA, a federal law that provides key health insurance protections for individuals facing temporary unemployment.

According to the Department of Labor, COBRA “gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events.”

COBRA’s major downside is its cost: covered individuals may be required to pay up to 102 percent of the plan’s cost. That often results in dramatic premium increases for individuals whose plan premiums were partially or fully covered by their employers.

5. Health Savings Accounts

Not everyone has a health savings account, and not everyone is a good fit for one besides. If you do have an HSA, though, it may help cover healthcare-related expenses during your job transition (and after). If you’re not sure how to handle your HSA during the transition, seek guidance from an expert.

6. Flexible Savings Accounts

As the name suggests, a flexible savings account is an all-purpose (almost) employer-sponsored fringe benefit that can help cover certain medical expenses. FSAs come with strict time limits, however, so it’s important that you decide what to do with your FSA balance before leaving your job.

7. Short-Term Health Insurance

Short-term health insurance plans provide temporary, affordable coverage during coverage gaps, including periods of unemployment. Short-term plans don’t meet Affordable Care Act guidelines, but they’re nevertheless crucial for relatively healthy patients looking to reduce downside risk in worst-case situations, such as catastrophic injuries or illnesses.

Need More Help?

Changing jobs is stressful enough by itself. Finding the right health insurance plan to complement your new gig is one more headache you don’t need.

To make matters worse, there’s no one-size-fits-all solution to select the right plan for your needs. Were there, health insurance would be a whole lot easier to find.

Fortunately, help is on the horizon. With the right health insurance partner on your side, the vast and often contradictory world of health insurance seems a whole lot simpler. If you’re looking for honest advice about the best health insurance plans for your needs, find that partner today. Everything that comes next will be a breeze.

Steve Dorfman is the founder and current CEO of two Florida-based firms: Simple Health and Simple Insurance Leads.

Alphabet Soup: How to Make Sense of Your Health Plan Options

By Steve Dorfman

Health insurance is bewildering, even for industry professionals. The various plan types, with their three- and four-letter acronyms, swim in a thick alphabet soup: PPO, HMO, EPO, HDHP.

Don’t be intimidated; dive in. Read on for more about the various health insurance plan options available in your area.

Preferred Provider Organizations (PPOs)

Preferred provider organizations, or PPOs, offer a fair amount of flexibility. PPOs don’t hold patients to specific providers, but they do have pretty onerous requirements for out of network visits. If you do choose to see a specialist or primary care provider outside your PPO’s network, you’ll need to fill out a considerable amount of paperwork and will be subject to substantial surcharges.

On the bright side, at least you have the choice to go out of network. That’s not always a given.

Exclusive Provider Organizations (EPOs)

Exclusive provider organizations (EPOs) allow far less choice than PPOs. In fact, EPOs forbid customers from going outside their approved networks. If you do choose to “cheat” on your EPO, you’ll need to pay the full cost of whatever services you procure out of pocket. On the bright side, networks tend to be pretty broad, and premiums are quite low relative to other health insurance plan types.

Health Maintenance Organizations (HMOs)

Health maintenance organizations, or HMOs, are built around approved primary care providers who serve as gatekeepers to the rest of the healthcare experience. Though they’re streamlined and affordable, they don’t offer as much choice as other plan types, and they can be problematic for consumers who need to see multiple specialists.

Point of Service Plans (POSs)

Like HMOs, point of service plans (POSs) revolve around primary care providers who coordinate care (including referrals) for patients. They’re less restrictive than HMOs, though, and less bureaucratic for patients who choose to (or must) go out of network. That said, out of network visits aren’t cheap.

High-Deductible Health Plans (HDHPs)

These plans are ideal for relatively healthy patients and those looking to bridge temporary gaps in coverage caused by job loss or other transient circumstances. In exchange for high deductibles and other costs, they have low premiums; happily, they’re still there for you in the unhappy (and hopefully unlikely) event of a medical emergency.

 

“If you don’t visit the doctor or hospital that much, and don’t expect to, these plans could be right for you.” — Steve Dorfman

 

What About All Those Metals?

There’s another cluster in the health insurance alphabet soup. Actually, it’s more accurate to call it a sparkle. It’s the infamous “metal” categories that distinguish health insurance plans by coverage and cost.

Health insurance plans fall into four “metal” categories, to be precise. Here’s what to expect from each:

  • Platinum: Platinum plans are the most generous of the four “metals.” Though each plan is a little different, you can expect your Platinum plan to cover virtually all of your healthcare expenses — about 90%, under normal circumstances. This plan type has the highest average premium.
  • Gold: Gold plans are the second most generous of the four “metals.” They cover most healthcare expenses, typically in the 75% to 85% range. Premiums are higher than lower-priced plans, but not as dear as Platinum.
  • Silver: Next to Gold and Platinum plans, Silver plans are comparative bargains. Expect yours to pay anywhere from 65% to 75% of your healthcare expenses. Premiums are lower than Gold.
  • Bronze: Bronze plans are the most affordable and least generous of the four “metals.” Expect yours to cover about 60% of your healthcare costs, all other things being equal.

There’s also a separate, non-metal category known, appropriately enough, as “catastrophic” — as in, catastrophic health plans. As the name implies, catastrophic plans are designed for unlikely but devastating eventualities, like serious illnesses or life-threatening injuries. They’re appropriate for otherwise healthy individuals with modest budgets, though it’s important to consider their pros and cons carefully. (One often-overlooked “pro”: preventive care is usually free, despite the minuscule premiums.)

Find a Health Insurance Helper You Can Trust

It’s a tough world out there for health insurance consumers. If you’re confused about where to turn or frustrated that you’re not getting access to the health plan options you know are out there, you need a health insurance helper you can trust.

Simple Health is that helper. Unlike so many others, we’re proud to put customers front and center in everything we do. We wouldn’t be who we are without everyday healthcare consumers like you. And, as healthcare consumers ourselves we know exactly what you’re going through.

Don’t make things harder than they have to be. Work with a partner you can trust to do what’s right by you.

Steve Dorfman is the founder and current CEO of two Florida-based firms: Simple Health and Simple Insurance Leads.

Does Obamacare Still Exist? 7 Myths & Truths About Health Insurance in 2018

By Steve Dorfman

A lot has changed since 2010, the year the Affordable Care Act passed into law.

What hasn’t changed much is the state of public knowledge about the ACA, popularly known as Obamacare. The Affordable Care Act remains the subject of misinformation and misunderstandings, some offered in good faith and some not. The situation is such that one of the most common questions health insurance experts hear today is shockingly basic: does Obamacare still exist?

It’s a fair question. And it’s just one of many that arise out of the myths and half-truths characterizing the healthcare industry in the post-ACA world.

Let’s take a closer look at it and five other myths, plus four “truths” that far too few healthcare consumers take to heart.

1. Myth: Obamacare No Longer Exists

Despite administrative and legislative changes to the structure of the Affordable Care Act, the law’s framework remains in place. You’re still entitled to many of the same benefits and protections, and you can still buy individual insurance policies on marketplaces run by state and/or federal authorities. Indeed, if you’re in the market for health insurance, you have more choices than you probably realize.

2. Myth: You Need to Pay Your Deductible Before You Can Use Any Health Services

Health insurance isn’t like car insurance. You’re not required to pay out of pocket before you can avail yourself of any of the financial benefits of your policy. For instance, many health insurance policies with relatively high deductibles nevertheless fully cover preventive care visits at in-network providers. Depending on your provider and network, this could easily save you hundreds of dollars per year.

3. Myth: You Can’t Get Coverage If You Have a Pre-Existing Condition

The ACA outlawed discrimination on the basis of pre-existing conditions, a once-common insurance industry practice. This was a huge victory for society’s most vulnerable — and those with routine “conditions,” such as pregnancy. While enforcement of this provision has changed over the years, it’s simply not true to say that you can’t get coverage if you have a pre-existing condition.

4. Myth: Employer-Sponsored Plans Are Always Better Than Individual Plans

Provenance is no guarantee of quality. Some employer-sponsored plans come with high premiums, limited networks, and benefits that don’t align with every patient’s need.

 

“Before you accept any plans your employer might offer, be sure to check what’s available on the individual markets.” — Steve Dorfman

 

A seasoned health insurance industry expert can help.

5. Truth: You Can Find Coverage That Fits Your Budget

his is another happy truth about health insurance: no matter how tight or expansive your budget, you can find a health insurance plan that fits your budget without sacrificing the coverages you need.

6. Truth: You Can Find a Health Insurance Plan With Superior Provider Choice

Oh, and you shouldn’t have to compromise on provider choice, either. Even if you live in a small town or rural area, you can likely find a plan with a broad-based provider network replete with primary care providers and specialists alike.

7. Truth: You Can’t Predict the Future

Lastly, remember the old adage: you can’t predict the future, try as you might.

The very concept of insurance is premised on this fact. If we knew exactly what would happen tomorrow, next month, or next year, we’d have no need to carry insurance until we really needed it. Which, of course, would upend insurance markets.

Even if you feel great right now, you never know what’s around the corner or down the road. You might need quality health insurance when you least expect it. And you’ll be grateful you took advantage of the good times (no matter how iffy they feel) to secure it.

What other health insurance questions are keeping you up at night? Are there any other myths you still need dispelled?

Bio: Steve Dorfman is the founder and current CEO of two Florida-based firms: Simple Health and Simple Insurance Leads.