Employee Group Benefits and Insurance Information

Employee and Group Health Insurance Benefits Click on the heading below to expand each topic. Here you will find info on Life Insurance, Health Insurance, Dental Insurance, Accident Insurance, Cancer Insurance, Critical Insurance Insurance, and Illness Insurance. Within each category is detailed information about the services offered for each. Get all the information you need to make informed decisions about your insurance coverage.

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Zane Defined Contribution Plans

Group Health Insurance

Group Health Insurance Benefits

Group Health Insurance

Group health insurance is simply health insurance offered by an employer with the main purpose of attracting and retaining good employees. 70% of Americans receive their health insurance through their employer. The idea of employer sponsored health care is a concept whose time has passed and is going to be obsolete in the next 5 to 10 years in my opinion. Group health insurance comes in many forms from self-insured plans as well as HMO, POS, PPO and indemnity plans. While somewhat larger companies (over 1,000 employees) will find true group coverage still viable, smaller companies under 100 employees will find a better solution.

Self Funded Plans

Self Funded Health Insurance Plans

Self–Funded Plans

Self–Funded Plans is self-funded health care provided by larger employers that medically insure their employees with its own funds. The employer takes on the risk for the health care of the employees. Most employer’s contract stop loss coverage from a carrier that covers in the event of a catastrophic loss thereby easing the overall financial risk for the employer. The employer does not pay premiums to an insurance carrier (except of course for the stop loss coverage) but instead simply pays the medical expenses for the employee as the expenses is incurred. Obviously, if the employee has no medical expenses the company saves money.

Fully Funded Plans

Fully Funded Insurance Plans

Fully Funded Plans

Fully Funded Plans is the traditional arrangement in which an employer contracts with an insurance carrier and for a premium the carrier will provide health care for the employee. Fully funded plans can be an HMO, POS, PPO or indemnity plans.

HMO (Health Maintenance Organization)

HMO Insurance Benefits

HMO (Health Maintenance Organization)

HMO (Health Maintenance Organization) is a specific type of health care plan which sets out guidelines under which doctors can operate. Typically, health care coverage through the use of an HMO is less expensive than comparable justified by the restrictions and price controls which limits the range of treatments available. An HMO does this by contracting with various providers of health care and dealing with large quantities of patients, the HMO is able to negotiate for discounted rates than the patient coming off the street would receive. Also, the HMO eliminates treatments that are unnecessary according to the HMO and rather focuses on preventative health care with the goal of achieving good long-term health of their members.

A member chooses a primary care physician when becoming part of an HMO. This primary care doctor determines what treatments the patient does and does not need. If the primary care doctor decides that the patient needs additional care beyond what they can do they refer to a specialist that can address the member’s needs.

POS Plans (Point Of Service)

POS Health Insurance Benefits

POS (Point of Service)

POS (Point of Service) is a type of managed health insurance plan that offers more choices than an HMO (which does not cover expenses outside the network or HMO.) POS members may seek care from in-network doctors, starting with a personal physician or out-of network providers for a higher cost. A POS plan is considered a combination of an HMO and a PPO (Preferred Provider Organization) plan. It has some of the price controls an HMO has (like going through your primary care physician before seeing a specialist.) It also offers some choice that a PPO has like the ability to go outside of the network. POS healthcare uses a network of preferred providers which patients must turn to first, receiving referrals to other providers if it is deemed necessary. Managed care ensures that patients get the medical attention they need, as long as they follow the system dictated by the insurance company.

PPO Plans (Preferred Provider Organization)

PPO Insurance Benefits

PPO (Preferred Provider Organization)

PPO (Preferred Provider Organization) is a type of managed-care system in which health care providers, such as doctors and hospitals, have made an agreement with the insurance companies to offer discounted fees to the members. The health insurance company gets a discount from the provider, which is passed along to the member, and in return the provider gets a much larger group of patients coming through the door.

The biggest advantage of a PPO is the amount of freedom they offer. Unlike other managed health care organizations, a PPO does not require you to maintain a primary care physician nor does it require you to use your primary care physician as a gatekeeper. This means that you can seek care from a specialist without first getting a referral. Also, you have the freedom to choose care from a provider outside of the provider network should you need it — the expenses can be substantially higher, but you at least have the option to choose any doctor or hospital you like.

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Groups Less Than 50

Group Insurance Benefits for Less Than 50 Employees

Groups Less Than 50

The Problem With Groups Less Than 50:

1) The first insurance principal that insurance students learn is the law of large numbers. A group of 5,000 employees has a large number to avoid an adverse selection, which is to avoid an abnormal population of employees with health risks. Take a group of 10 employees. If one or two employees have a health risk such as obesity, diabetes, cancer or heart bypass surgery the premium will increase dramatically and the remaining healthy employees will bear the burden of increased costs because of the claims of the unhealthy employees.

2) When an employee is terminated, the employer is held accountable for the administration of the continued health care that the terminated employee is entitled to through HIPAA legislation. This is bad for both employer and the terminated employee. The employer must be in compliance with cobra or state continuation depending on the size of the company. The terminated employee must then pay the ex-employer from 100-102% of the premium. The new increased health premium due to cobra for the terminated employee becomes more burdensome because before termination the employee had the health premium subsidized by the employer in most cases, by at least 50% or more. The ex-employee is now without a job and finds their health coverage double in cost. In the search for new employment finding an employer that sponsors a group health plan is crucial and even more difficult to do these days. Many employers are dropping their employer sponsored health care altogether.

3) A common strategy for employers to save on costs is to have their broker shop the market for a new health insurance carrier that can compete with the rising costs of the current carrier. If a switch is made, the employer must explain to employees (and sometimes their dependents) why the female employees and dependents must find a new Gynecologist because the current doctor is not in the network. Other problems often occur by switching plans which can stir up grumbling and dissention between employees and the employer. The employer is paying a huge sum for employer sponsored health care and in addition is subsidizing the costs for the employees…and now they are grumbling because the employer is just trying to save on expenses by considering an alternative low cost plan/carrier. In the words of Dr. Phil, “how’s it working for you?”

4) Why do you want to be in the insurance business? The whole system of employer sponsored health care revolves around the employer. The employer went into business doing whatever it is that they do because they saw an open door of opportunity. They went into business because they enjoy manufacturing those widgets they love or servicing those thing-a-ma-gigs they lovingly made. Why then do you allow your employer sponsored health plan take up more and more of your time, energy and profits? If you still like your group health plan we can help you…yes, we still do them representing Blue Cross Blue Shield, Aetna, United HealthCare, Humana and others. But if you would like to “get out of the insurance business,” save on costs and still retain great benefits that your employees manage giving them more options and most importantly controlling their own health care…call us NOW!

5) Costs are astronomical! Health insurance is a crisis for employers, as well as individuals. Since 2005, General Motors has added $1,500.00 to the cost of every car it sells in order to cover the cost of health insurance for their employees. The cost of health benefits now exceeds profits for most Fortune 500 companies.

6) With more and more employees seeking coverage elsewhere, many employers are faced with participation requirements.

Cafeteria Plans

Cafeteria Insurance Benefits

Cafeteria Plans

Cafeteria Plans One of the most underrated and underused employee benefits available for small businesses today is outlined in section 125 of the U.S. tax code. A section 125 or “cafeteria” plan allows employees to withhold a portion of their pre-tax salary to cover certain medical or child-care expenses. Because these benefits are free from federal and state income taxes, an employee’s taxable income is reduced, which increases the percentage of their take-home pay. And because the pre-tax benefits aren’t subject to federal social security withholding taxes, employers win by not having to pay FICA–or workers’ comp premiums–on those dollars. With so many advantages, why is the plan underused? The most likely reason is that these plans don’t generate a lot of profit for benefit administration companies, and with little profits to earn, only minimal advertising is being done. That means many people are unaware the plan even exists. But utilizing the tax code for your business can be an incredible way to enhance your employee benefits package, while simultaneously boosting your margins.

There is recent legislation regarding Cafeteria Plans. Until recently, only group benefits were used in conjunction with Cafeteria Plans, but now they can be used with individual benefits. Why is this so significant? Employers can now use these plans to save money for their employees, save money for themselves and provide better benefits with none of the hassle.