Cost Considerations for Clients Shopping for Healthcare

Cost Considerations for Clients Shopping for Healthcare

Understand the factors that impact the cost of employer-sponsored care and what to do about it.

Open Enrollment for 2017-18 is nearing an end, and employers are shopping for care. They’re looking for healthcare options that fit their employees’ demographics and their medical needs, have convenient network accessibility, and most of all, are affordable for everyone.

Choosing healthcare can be tedious for those seeking affordable, high-quality care. Transparency is important to us here at Canopy Health because we know your clients are seeking cost-effective health insurance for their employees. Below is a breakdown of key cost considerations for employers as they navigate group health insurance plans.

What Is the Cost of Providing Healthcare? 

The 2015 employer mandate requires any employer with 50 or more full-time equivalent (FTE) employees to provide healthcare to avoid a tax penalty, and many small businesses under 50 FTE also like to provide health benefits to their employees. The cost of providing healthcare depends on several factors, including the type of plan and an employer’s contribution strategy. 

Group Health Insurance Plan

A group health insurance plan, or employer-sponsored health plan, is one on that businesses purchase and provide to cover all eligible employees and their dependents. Depending on the type of plan offered (PPO, HMO, EPO, etc.), the cost of employee-sponsored healthcare varies:

On average, group health insurance costs the employer:

  • $5,179 per year for single coverage, covering 83 percent of the premium 
  • $12,591 per year for family coverage, covering 72 percent of the premium

Group health insurance can be tailored to a client’s needs. Factors that determine how much employers pay versus the employee contributions include:

  • Cost-Sharing Items: Different plans have varying deductibles, co-pay amounts, co-insurance, and out-of-pocket maximums paid for by the employee.
  • Monthly Premiums: A higher monthly premium doesn’t necessarily cut costs for an employer.
  • Prescription Coverage: The Affordable Care Act (ACA) requires some prescription drug coverage, but allows considerable variation in healthcare coverage.

Why Is Healthcare So Expensive? 

Healthcare prices are less about logic and more about the behind-the-scenes negotiations between hospitals, doctors, labs, drug companies, and manufacturers. Honest prices are difficult to find due to competing providers, and often, prices are “estimated” based on who’s paying the bill. Well-known medical institutions may use their prestige to hike the cost of care, but not necessarily deliver a higher-quality experience. Trends in healthcare that impact the cost include:

  • Overtreatment: Unnecessary procedures, medications, or scans.
  • Pharmaceutical Costs: Brand name drug companies charge what the market dictates, not what the drug should cost based on manufacturing costs.
  • Touting the Progressions: Practitioners may push a new procedure because it’s trending, not because it’s necessary.

Canopy Health is committed to honesty and transparency. We have a network of partners and alliance members we trust to provide high-value care — so your clients and their employees can rest assured knowing they are paying for exactly what they need at the best price.  

Ways to Lower Expenses 

Before your client commits to a healthcare plan, encourage them to evaluate the healthcare needs of their employees. Determining what kind of care and what benefits are most important to employees can ensure your clients are delivering plans that satisfy everyone. Some questions to consider when choosing a group health plan include:

  • Who will be covered under your plan? 
  • How much cost-sharing can you afford? 
  • Would your employees rather pay a higher premium than have a high deductible, or vice versa? 
  • What kinds of benefits are most important to you and your employees?

A high-deductible healthcare plan (HDHP) may cost the employer less upfront. On average, large employers pay $84 per month for HDHPs compared to $132 for traditional PPOs. If an HDHP structure fits the needs of your client and their employees, it’s one way to lower costs without reducing the percentage of their premium contribution.

Canopy Health Has Answers

Educating clients on their healthcare options can seem like a daunting task, but with the help of our expanding network and commitment to refreshingly clear, human care, clients will find a healthcare option that fits their needs. Cost-effective, transparent care is easy with Canopy Health’s growing options. Click here to learn more about the plans being offered by our insurance company partners to access the Canopy Health network. 

We are committed to providing Bay Area insurance brokers with the information and healthcare options that fit the needs of their clients. We can help you guide clients to receiving the healthcare they want and need. Contact us at 888-8-CANOPY to learn more about our alliance partners, distinguished providers, and the convenience of our expanding network in the Bay Area.

References
Merhar, C. (2015, September 28). FAQ – How Much Does It Cost to Provide Health Insurance to Employees? Zane Benefits. Retrieved from https://www.zanebenefits.com/blog/faq-how-much-does-it-cost-to-provide-health-insurance-to-employees

Renter, E. (2014, December 2). 5 Things to Consider When Comparing Health Insurance Plans. U.S. News & World Report. Retrieved from https://health.usnews.com/health-news/health-insurance/articles/2014/12/02/5-things-to-consider-when-comparing-health-insurance-plans

Scorsch, K. (2016, October 29). Employers love high-deductible plans. Employees? Not so much. Chicago Business. Retrieved from http://www.chicagobusiness.com/article/20161029/ISSUE01/310299993/employers-love-high-deductible-health-care-plans-employees-not-so-much