Healthcare Crash Course

Raise your awareness about providing healthcare insurance

Never offered benefits before?

Analyze your needs first. What do your employees currently have? They're getting it from somewhere. They have coverage through their spouse, a government program, COBRA or they might not have coverage. The potential new carrier is going to want to know this information along with age, date of hire, position, salary, where they live and more to determine how to price the coverage in preparing your quote. There's a lot to know and collect and it's possible to do this on your own. Working with a broker can make this process easier. A broker's experience also allows for a better understanding of your employees needs which typically results in more appropriate coverage.

The next step is to take this information and go out into the marketplace to source options. There is a variety of healthcare plans and options and it's important to pair the right plan with your employees needs. HMO, PPO and HDHP (see glossary of terms below) are the major categories of healthcare programs with each having significant nuances. Sifting through the mountain of options is time consuming but with research you can determine which option is suitable. An experienced broker can provide creative solutions to maximize your healthcare investment without compromising your employees' care.

Once you've selected an option you need to fund the program. There are multiple ways of doing this, handling employer contributions and more. For example, if you select an HMO, you'll need to determine what your contribution as the employer will be, if any. An HRA (Healthcare Reimbursement Account) or HSA (Healthcare Savings Account) may come into play if an HDHP (High Deductible Health Plan) is your plan type choice.

The final step is the enrollment process. This is a crucial step and where many fall off track. As the employer, you'll enroll your company with a provider. Then you'll need to enroll each employee who wishes to participate in the group plan. An application needs to be processed. There are many potential errors that take place in this part of the process because of the complex nature of the application process. Enrollment can be a time consuming process but it has to be done within a specified window of time in order to get employees membership cards and access without having gaps in their coverage. If funding with an HSA, each employee has to setup a separate bank account which must be done at the right time. There is extensive paperwork with deadlines so having a strategy laid out ahead of time will be essential.

Some other points of interest to understand:

HIPAA PRIVACY RULE - WHAT EMPLOYERS NEED TO KNOW

Once you begin offering health insurance you, all of a sudden, have access to a lot of private and protected personal employee information. HIPAA is the law that governs this.

One of the most important aspects of the Health Insurance Portability and Availability Act of 1996 (HIPAA) is its privacy protection. The law gave the U.S. Department of Health and Human Services the responsibility of adopting rules to help patients and other health care consumers keep as much of their personal information private as possible. The HIPAA privacy rule went into effect on April 14, 2003 for "covered entities", and even though employers are generally not covered entities, they are definitely affected by the rules applying to entities that are covered. The HIPAA privacy rule Web site from HHS has much guidance on the rule, including a very lengthy Q & A section that attempts to cover the privacy rule from the standpoint of covered entities, employers, health care consumers, health care providers, and other interested parties.

Top 5 things to know about healthcare reform

1. If you have up to 25 employees, pay average annual wages below $50,000, and provide health insurance, you may qualify for a small business tax credit this year of up to 35% (up to 25% for non-profits) to offset the cost of your insurance. This will bring down the cost of providing insurance.
2. Employer-based plans that provide health insurance to retirees ages 55-64 will be able to get financial help through the Early Retiree Reinsurance Program that starts in June 2010. This program is designed to lower the cost of premiums for all employees and reduce employer health costs.
3. Starting in 2014, the small business tax credit goes up to 50% (up to 35% for non-profits) for qualifying businesses. This makes the cost of providing insurance even lower.
4. Starting in 2014, small businesses with generally fewer than 100 employees can shop in an Exchange, which gives you power similar to what large businesses have to get better choices and lower prices. An Exchange is a new marketplace where individuals and small businesses can buy affordable health benefit plans. Exchanges will offer a choice of plans that meet certain benefits and cost standards. Starting in 2014, Members of Congress will be getting their health care insurance through Exchanges, and you will be able buy your insurance through Exchanges, too.
5. Employers with fewer than 50 employees are exempt from new employer responsibility policies. They don't have to pay an assessment if their employees get tax credits through an Exchange.

Source: www.healthcare.gov

Glossary of Terms 

Deductible - The amount of money, or value of certain services (such as one physician visit), a patient or family must pay before costs (or percentages of costs) are covered by the health plan or insurance company, usually per year.

Employer Contribution - The contribution is the money a company pays for its employees' healthcare.

Exclusions - Health conditions that are explicitly not covered in an insurance package and that your insurance will not pay for.

FSA (Flexible Spending Account) - With an FSA, money is taken from your paycheck before taxes (you set the amount) and put into an account. You can then use that money to pay for medical expenses throughout the year. It's important to understand that FSAs have a "use it or lose it" provision — meaning that you must use the dollars in the year in which they are saved or you will lose them at the end of the year. Check with your plan to make sure expenses are "covered," meaning they are approved by the Internal Revenue Service as a qualified medical expense that can be paid for with your tax-free dollars.

Health Insurance Portability and Accountability Act (HIPAA) - Also known as Kennedy-Kassebaum law, this guarantees that people who lose their group health insurance will have access to individual insurance, regardless of pre-existing medical problems. The law also allows employees to secure health insurance from their new employer when they switch jobs even if they have a pre-existing medical condition.

Health Maintenance Organization (HMO) - A health plan provides comprehensive medical services to its members for a fixed, prepaid premium. Members must use participating providers and are enrolled for a fixed period of time. HMOs can do business either on a for-profit or not-for-profit basis.

Health Savings Account (HSA) - A tax-free, employee owned account that combines with a high deductible health plan to help employees save on qualified medical expenses.

High Deductible Health Plan (HDHP) - With a HDHP, preventive services are covered in full. For other services, you pay a deductible up to a certain amount, depending on the plan chosen by your employer. After you reach the deductible, you pay a percentage of cost but are protected by an out-of-pocket maximum. A HDHP is usually paired with a funding source such as a Health Savings Account, Health Reimbursement Account or Flexible Spending Account.

HRA (Health Reimbursement Arrangement) - An HRA is an account offered to employees or retirees, where you can use the money to pay for deductible and co-insurance amounts, or covered medical expenses. It is often paired with a high deductible health plan, but doesn't have to be. Like an HSA, leftover dollars generally can be used from year-to-year, as long as you continue to be a member of the plan. Also, the money is contributed by your employer and doesn't count as income; saving you valuable tax dollars.

Network - A group of affiliated contracted healthcare providers (physicians, hospitals, testing centers, rehabilitation centers etc.), such as an HMO, PPO, or Point of Service plan.

Open Enrollment Period - A specified period of time during which people are allowed to change health plans.

Participating Physician or Provider - A healthcare provider who has contracted with a managed care plan to provide eligible healthcare services to members of that plan.

Point of Service (POS) - A type of insurance where each time healthcare services are needed, the patient can choose from different types of provider systems (indemnity plan, PPO or HMO). Usually, members are required to pay more to see PPO or non-participating providers than to see HMO providers.

Pre-existing Condition - A medical condition or diagnosis that began before coverage began under a current plan or insurance contract. The insurance company may provide coverage but will specifically exclude treatment for such a condition from that person's coverage for a certain period of time, often six months to a year.

Preferred Provider Organization (PPO) - A type of insurance in which the managed care company pays a higher percentage of the costs when a preferred (in-plan) provider is used. The participating providers have agreed to provide their services at negotiated discount fees.

Premium - The amount paid periodically to buy health insurance coverage. Employers and employees usually share the cost of premiums.

US Dept of Health & Human Services - The Department of Health and Human Services is the principal agency for protecting the health of all Americans, especially for those who are least able to help themselves. HHS represents almost a quarter of all federal outlays, and it administers more grant dollars than all other federal agencies combined. HHS' Medicare program is the nation's largest health insurer, handling more than 1 billion claims per year. Medicare and Medicaid together provide health care insurance for one in four Americans.