What kind of health insurance does a business provide to its employees?

Question

Describe the measures they take in hopes to contain the cost of health insurance.

Answer 1

There are several ways to keep the cost down but here are a couple. Statistics show that only 25-30% of insured americans meet their deductible in a calender year. So businesses could choose a plan with the highest deductible possible to keep the premium down and then reimburse it's employees (theoretically 30% of them) for incurred medical expenses, to whatever dollar amount they wish. This is called an HRA.
Secondly, if the group is fairly young (average age less than 40) they can self fund their prescription coverage through a third party. The premiums charged for prescription drugs are a HUGE moneymaker for health companies (Blue Cross). If you self fund, the employer only pays for prescriptions that are used by the employees not a monthly premium rate from the insurance carrier.
In the last 2 years here in Michigan, group health rates have increased up to 20% each year (differs from group to group). We use the reimbursement concept with all of our groups (about 50) and the self funded prescriptions with about 15 to keep that annual increase to about 6-8%.
Hope this helps

Answer 2

The whole employer provided health insurance program came about because there was a time when wages were frozen by the government, and employers needed some way of getting people to work for them. Higher pay was not an option, so all they could do in that situation was to offer better benefits. Since then it has been seen as an entitlement for employees that their employer provide health insurance. Over the years managed health care, and defensive medicine have driven up the cost of health care, and turning the job of providing insurance to the government won't do a thing to fix that.

Answer 3

Most large companies offer a group comprehensive (HMO)plan, whereby an insurer charges them a discounted rate for a bulk number of employees. The smaller biz pays much higher due to the fact of being denied a large group discount. Deductibles and Co-pays may be increased to offset the insurer's cost and ultimately the employer's cost. The last thing both of them want is an employee running to the doctor, to get 7 MRI's per month for a pesky hang nail. Therefore more costs are placed on the employee. They also may pay an employee a lower salary or wage to account for the cost of insuring that new employee. If an employee could make $50K per year, the employer might only offer to pay this individual $42K gross.

Answer 4

They market out the benefits every year. That's it.

Some business don't provide ANY health insurance for employees. Some provide access, but the employee pays the cost. Most share the cost of a group policy with an employee, and only government workers or NEA members (aka, public workers) get full health insurance paid by taxpayers.

Answer 5

Scott has the right idea. Buy plans that have high deductibles, but still have office and RX co-pay benefits (first dollar coverage - no deductible). The employer then sometimes agrees to reimburse part of the employee's deductible if they ever use it. That is the HRA - Health Reimbursement Arrangement.

I also like to offer dual choice plans. Have the employer sponsor (pay 50 to 100% of the employee's premium) for a lower cost plan, but offer a richer plan that if the employee wants better coverage, they can "put their money where their mouth is" and buy a richer, more expensive plan.

Answer 6

by shifting more and more of the cost onto the employee. high deductible plans now the rage (HSA) in hope that employees will be smarter consumers. Just another futile attempt to preserve the current system, on the path to single payor

Answer 7

It really depends. Most businesses want to keep their costs to a minimum, so they look for the least expensive plan - unless employees are to contribute to a more costly one.

Answer 8

This question is really way to vague to answer. Each company has its own way of determining whether they will offer insurance and the plan they offer. There are too many variables to answer this question with specificity.

Answer 9

the best would be the the employer-employee insurance, under the group insurance category