On the group commercial insurance side of the business, there are two major open enrollment periods. The first one is a July 1st start date. Probably a quarter of all commercial groups have policies that start on July 1. The biggest one is the January 1st start date where over half of all policies start then. Here are just a couple of things to remember as the open enrollment period for July is coming to a close:
- Most large employer groups have HR departments that have already done most of the shopping for you. You’re probably going to be presented with a fairly narrow range of choices that already meet a price criteria set by HR.
- Are you being forced to shop on a private exchange? These are becoming more common, and usually what it does is offer more choices which segments the risk pool and tilts the subsidization field towards the employer compared to offer a one size fits all approach.
- Pay attention to the networks. Networks are getting narrower again as employers are seeing the relative success of the Exchange narrow network and their pricing and employers are asking for better deals. Networks are usually the easiest way to get better pricing.
- Pay attention to how your company makes its contribution. Is it a percentage of total costs? Do they cover the employee at a high rate and dependents at a low contribution rate? Do they put money into an HRA or an HSA? Do they make eating the a big deductible plan somewhat appetizing?
- What is your health status? Are you relatively healthy and able to afford a $1,500 surprise expense? Or do you know that you are either sick or a $1,500 bill sinks you for the year? If you can afford a surprise, a high deductible plan might be appropriate.
- Pay attention to how your company is handling same sex marriage versus domestic partner benefits. In states that have legalized equality and non-bigotry, companies are moving away from domestic partner benefits as all of their employees now can get married to the person that they love. Companies are looking to trim their costs, so only offering spousal benefits instead of long term partner benefits is an easy trim in non-bigot states.
Ok, so it’s good that some states made up for the difference by offering domestic partner benefits (and in MA, some cities still do for city employees), but SHEEIT. Apologies for the gripe, but the policy/principle that you have to marry the person you love in this country to be treated as if you matter just bugs the freaking crap out of me. Or that in order to get health care you have to GET MARRIED. IMO this is not a same-sex issue, it’s an equal treatment issue. Our gov’t wants people to get married, ESPECIALLY the poors, and I get that it’s policy (see tax, etc) but gawdsalmighty that’s a STUPID STUPID way to go about policy. I know, that’s the way it is here in the land of FREEDUMB but OMG this drives me crazy. So crazy this is really an incoherent rant, when what is called for is a longer, more coherent and well-argued comment, but who’s got time for that? Not me, sorry. Over and out.
(Apologies, Richard: your posts are unfailingly interesting and informative and I always learn something new–so thank you!)
Richard – I always learn a great deal from your posts, but I have a question – how do the private exchanges tilt the subsidization towards employers? I get that a relatively healthy person will make different health plan choices than someone with a chronic illness, but I get lost after that. Thanks so much for writing these posts!
I a disagree that companies are trying to trim their cost.
When you get stuck with a 15% or 20% increase and a “good year” is considered any premium increase under 10% from the previous year, companies are mostly trying to keep costs neutral in the face of ever rising costs from insurance companies.
@Auntie Anne: Scream point management is how they are trying to minimize employer subsidization. Let’s take a scenario where the employer agrees to pay 80% of the premium and there are several Pointy Haired Bosses who are reasonably powerful and not too healthy and who are known to loudly and effectively complain if their docs/hospitals and rehab centers aren’t in the network at low/no cost sharing.
Under a 1 size fits all policy, part of the selection criteria is making sure that the plan that is picked won’t make those PHBs scream. That probably means the company’s main offering is a low deductible, big network PPO. That is expensive. Most people probably would be okay with a bit less coverage or a narrower network to save on their 20% of the contribution.
In a private exchange scenario, big network, low deductible PPO is still offered, but there are also narrow network, low deductible PPOs, high deductible plans, EPOs and a bunch of other things that are a bit cheaper but still very good coverage (in ACA terms Gold or better). Most of the people will choose something a bit skimpier than the one size fits all, scream constrained PPO. So the employer will pay less in subsidy for those cheaper plans, most employees will pay less, while the PHBs whose screaming had constrained company plan choice in the past still can get the big networks that they want.
Ok, that makes sense. I just wasn’t getting it – obviously not enough coffee! My company is in an interesting position this year – we’re moving back from a high deductible plan to offering choice, one of which will probably be a scream constrained PPO. Interestingly enough, it hasn’t been the bosses screaming about the HDHP – it has been the employees. We have a mostly older population, though, and we’re only in our 7th year of requiring any employee contribution at all. It will be interesting to see how this works out.
@Auntie Anne: Usually it is the PHB whose screams will be listened to. My experience only has been that the entry level positions and low level experienced staff can scream, but they might not be heard, while the Assistant Director of Paper Clips can yelp and get a reaction.
I work for a BIG company (wholly owned subsidiary of a Fortune 500 company type deal), and last year it went entirely to high deductible plans and HSA’s. (Pretty sure we’re self insured, so our ‘choice’ was would we rather be administered by Aetna or Cigna).
Even choosing the lowest deductible and maxing out my HSA contribution (legal limit) I’ve spent the first six months of this year struggling. It’s been the most stressful, godawful thing my company’s ever done. My wife required minor surgery (don’t even want to get into the in-network/out of network snafu that caused) and it’s not like they front-load my HSA. Sure I can pay myself back at the end of the year, but I had to borrow to cover her surgery and pay tons of costs out of pocket because her surgery ended up being like half my total HSA contribution for the year.
I’ve been considering changing jobs — from a company I’ve loved and worked for for years now — because this stupid plan has been killing me.
I’ve got a family, and I can also do math. This change didn’t “save me money” despite my premiums going down. It cost me a TON of money.
I honestly wish they’d just give me the money they pay towards my premiums and let me shop the exchanges. I’d get a better plan, one that actually fit my needs AND my taste for risk. (I’d rather overpay monthly and avoid giant bills than pay less and occasionally have to fork over larger sums. I prefer predictable costs, even if it’s more expensive).
This has been my company’s experience as well, including some significant turnover attributed to the HDHP. Most employees who have to use the plan for anything beyond a doctor’s visit feel the same way you do.
@Auntie Anne: I’m not exactly a Republican, but I’ll say this: The first six months of this year has created a bone-deep reflex to SCREAM at the words “High deductible plan” and “Healthcare Savings Account” or acronyms thereof.
I literally, after just six months of this nonsense, could not vote for anyone pushing it as a solution to anything. Honest to God, my dream candidate could come up and that be the ONLY thing he and I disagree on, and I’m pretty sure I’d vote against him or her based solely on that.
That’s how awful it’s been. Which makes me think that if it’s not just me, maybe the GOP is lucky they never DID manage to replace the ACA with HDP’s. They’d start a revolt.