How to Choose Health Insurance
By Emily Evans
Dah nuh. Dah nuh. Dah nuh dah nuh dah nuh (insert Jaws theme here). Open enrollment is here! Sounds scary, doesn't it? For some people, it’s the time of year their HR person starts hounding them to get paperwork done, or to sit through an hour long meeting on benefits that make no sense until you have to use them. For others, it’s the time of year to be confused, yet again, on what plan to pick or what’s best for their family. Knowing how to choose health insurance is a necessary chore if you’re a small business owner.
What to look at when you’re not sure how to choose health insurance plans:
Monthly Cost - of course you need to consider what the monthly cost will be, just don’t get stuck here as there are additional things to look at besides only that number.
Deductibles - this is the amount of money that will come out of your pocket before your insurance company starts kicking in to help. From what I’ve seen with my clients, most deductibles today range from around $1,500 - $6,000.
Out-of-pocket Maximums - this is the amount of money you are responsible for on an annual basis if something major happens. Typically, you’ll see the number 80/20 or something similar thrown around. That means that once you hit your deductible, the insurance company picks up the tab at 80% and you pick it up at 20% until you hit your out-of-pocket maximum. According to the Department of Health & Human Services, these can be up to $7,350 for individuals and $14,700 for families.
Co-pay - while this isn’t something that will make or break you, it is good to know what a visit to the doctor will cost if you need to go. Keep in mind that all health plans are required to have one wellness visit per year with no cost to you. (Just be careful of discussing other issues while you’re there as the doctor will change the appointment from a “wellness” visit to a “diagnostic” visit and can then charge you.)
PPO vs. HSA - a PPO will be what you think of when you think health insurance: there’s a wide network, and you can choose your doctor. This type of plan will typically have a smaller deductible and will include co-pays to doctors/specialists. This type of plan is good if you know you go to the doctor on a regular basis and you’ll be using your insurance often. An HSA is what most people are scared of, but in my opinion it’s often a great choice for most people. This will usually have a higher deductible than a PPO plan and you’ll have to meet your full deductible prior to the insurance company stepping in to help. (There are also HMO plans out there that are designed to work like a PPO, but with a limited network)
To Offer or Not
As a small business owner, you have the choice to offer health insurance benefits or not, depending on the number of employees you have. You’ll want to choose carefully based on your budget and may want to look outside the box. There’s more out there than what you normally think of when offering benefits, from self-funded plans to defined contribution options. Whether you do or you don’t offer benefits through your company, the points above are important to consider when you’re deciding how to choose health insurance plans.
Always consult a benefits professional to look at all of the different ways to provide additional options for your employees to be protected.
About the Author
Emily Evans has been an Independent Agent with Aflac since 2011 and started her career because of a major motorcycle accident she and her husband had in 2010. That accident caused them to realize how much people need help when they have a catastrophic illness or injury and she uses that experience daily to help her clients.
Emily builds relationships throughout the East Valley with business owners who have a growth mindset, working closely to help them develop strategies to utilize voluntary benefits to create a better culture in their company. She focuses on companies with a growth mindset because she enjoys working in a fast paced environment where people care.
On the weekends, Emily enjoys taking naps in her hammock, photography, camping, off-roading, and riding motorcycles. She can usually be found hanging out with her husband, Peter, and their three dogs. To contact Emily, please text “Emily Evans” to 36260 to download her app.