Switched plans--tell me I did the right thing
Paige
153 Posts
OK--we made the switch from a traditional HMO ($15 copay for office visit; $50 per day for hospital stay; $7/$15/$30 drug benefit) to a high-deductible PPO w/HRA ($2000 ded for single; $4,000 ded for family; company pays for first half of ded in either case). If we had stayed with the HMO, our rates would increase 22% this year. Going with the PPO, our rates are decreasing 9% from our current rates. Company was willing to stay w/HMO, but thinking ahead we're pretty sure we would have had to switch at some point anyway.
So, the meeting with the employees is on Thursday. Please tell me we did the right thing in switching (i.e., any reassurance you can give me before the meeting on Thursday would be MUCH appreciated).
So, the meeting with the employees is on Thursday. Please tell me we did the right thing in switching (i.e., any reassurance you can give me before the meeting on Thursday would be MUCH appreciated).
Comments
How do you cover preventative health care?
I would say be prepared for a lot of grumbling and very unhappy employees.
If I was in your position with a hike in rates on the HMO side (I offer both PPO and HMO plans to our employees) I would have looked into raising the co-pay amounts on the HMO plan to get a lower premium rather than switching to a PPO plan. I'm surprised your insurance agent didn't suggest that to you.
All water under the bridge now though.
That is correct. Some of the "grumblings" are people saying, "But I don't have $1,000." But, yes, the er pays first, then the ee. And by that time, you're dealing with major medical expenses that would have out-of-pocket costs associated with them anyway--HMO or PPO.
How do you cover preventative care, such as physicals, mammograms, prostate screenings, etc? Are they applied to the deductible?
Some PPO's do not include the office visits to your deductibles. Example:
John goes to the doctor pays a straight 15.00 the doctor refers him to a lab for tests he pays another 15.00 only the lab would go towards deductible.
What does the PPO cover? Does it offer something more than the HMO? Other than freedom to see a doctor or different doctors.
The deductible is pretty high but you are not comparing apples to apples here. In order to answer if it is the right thing we would need more details as to the plans and what were offered from your brief description your HMO coverage was very good but there are so many other options available in order to remain in an HMO I would have tried to look for a better less drastic solution but again not enough information.
Good Luck I would expect alot of questions from your employees.
As an employer you don't have to worry about administering it. The ee has to report savings and expenditures. The account can be set up at any bank with a trust department, as well as with some insurance companies.
My ee's currently pay over $1000 year for single coverage and almost $3000 for family premiums. With an HSA and no premium to pay, they would save money.
Note: make sure your plan qualifies as a high deductible plan under the HSA. There are some limitations. HSA's went into effect on Jan 1st of 2004, so it's new territory.
Just to answer some of the questions presented:
Yes, the money in the HRA that does not get used rolls over.
When we mapped it all out, the company is saving money unless someone uses 100% of their deductible--so even with our potential liability with the $1000 or $2000 share of the deductible, the company is still saving money.
We have an FSA--is HSA different than HRA or FSA?
Thanks.
I hope your ee's were nicer than we were.
This is a good place to be challenged if you're sincere about learning, want to do a good job, and want to do what is beneficial for your organization's employees. I'd much more prefer to read written criticism that has some level of intelligence behind it (and have a chance to learn from it) than take someone yelling in my face in front of a group, calling me names, telling me I don't care, or saying who knows what.
Paige, I would be the subject of a lynching if I tried to change our health from a PPO to a HMO. I take a survey each year to see if anyone has changed their mind, and it is always unanimous that we stay with a PPO. So I believe that your decision was good for your employee's health. As someone said previously, meeting a high deductible generally means a major health issue.
Several sides were presented in this discussion--those that said not such a great move, others that said well it has some pros and cons, and others who said if it was a choice that had to be made, it had to be made. I pretty much got the same responses from people here at work.
I really do feel better after reading the posts. I'm very surprised with the company that prefers PPO over HMO--more or less because I'm used to dealing with HMOs, but that's great that the employees are satisfied with the PPO.
Thanks, again, everyone.
They (we had one in the morning and one in the afternoon) went OK. People were not happy, but at least it didn't break out into a riot. We only have about 28 on our plan.
People ARE very concerned. We do actually have a couple that understand this sort of thing is happening everywhere--it's a reality.
Of course the people who are complaining the most are the ones who need a lot of health care. Darn it! They're the ones driving up our costs. Most of these people are also low-income workers.
I really do understand the concern. The trick is getting people to look outside of their own bubbles. Yes, you have a lot of medical costs BUT do you realize that our carrier has taken a $50,000+ loss on our plan for the past 2 years? Do you realize there will come a time when our company may not be able to afford to offer as much of a benefit as we do now (we pay 70% of the total premium)? It's just very frustrating.
I acutally came away form the second meeting feeling pretty good--there didn't seem to be as much opposition there, and there were a couple of managers there who offered some supporting comments.
Thanks for asking.
You are absolutely correct, Paige, that rates will continue to rise to the point where employers can no longer afford to provide health insurance benefits to employees.
We are examining several alternatives, keeping what we have which is a PPO or going to a HSA which is portable and the money does roll over and belong to the employee. In theory because it belongs to the employee, they will not be as free with "their" dollars. Maybe...maybe not.
There is no easy answer to this. We are forming an insurance task force made up of staff employees and educating them on the whys and wherefores of health insurance costs. Their mission is to go out and solicit ideas from other employees or at least let them know what's going on. I've found if people know what the score is, they tend not to get as upset as if you spring it on them at the last minute.
Really--it IS good to hear from someone who is in the same boat and understands the dilemma. You hit the nail on the head--it's all about high utilization. But, getting the employees to realize that isn't an easy task. Health care is an entitlement--to be used however is convenient for them.
The task force you are setting up sounds like a great idea. Good for getting employee's input and to give them a greater understanding of the dilemma as well (not to mention their backing and support when the decision needs to be announced).
One of our directors (who's not so much in favor of the change for her own personal reasons) called me this morning stating that people were coming to her, complaining, threatening to drop the plan, quit, etc. (yeah--happy Monday). I finally told her, here's the facts--we stay where we are and the company may not even be able to afford to keep paying 70% of the premium. We may only be able to afford 50% of the premium. That, of course, got her thinking. So she calls back later stating she has most of her employees convinced now that this is the way to go and in the long run, we will be better of. Sometimes you just gotta say it like it is.
Thanks for the response.
More importantly, it changed employee behavior and put employees in the drivers seat and made them more aware of costs. Now they have to process EOBs and understand them. I think we have developed some excellent health care consumers.
This year during the renewal announcement talk I had to give them a very detail explanation of the bid process, the results of the bids, plan designs we considered. We've created an educated group of people - which is great! Our experience mod rate was great and our rates only increased by 10 percent - which is good in Wisconsin.