According to a study by PricewaterhouseCooper, U.S. employers can anticipate their health care and insurance costs to rise by 9 percent in 2010—after a 9.9 percent increase in 2008 and a 9.2 percent increase in 2009. But news reports tell the story that some employers are facing a greater share of this burden, as they watch their premiums go up by double-digit percentages. And, while health insurance companies are rising premiums pretty much across the board, many employers are taking the wise step to see if a better option is out there. Of course, as responsible employer knows, it's not simply about the costs. Picking the best plan for group health coverage is an especially hard choice given that individuals have very different priorities when it comes to coverage, costs, and health care providers. Here's what you need to consider to pick the best plan for your group health coverage.

Group Health Coverage: 5 Things to Consider when Picking the Best Plan

1. Monthly Premiums: The first mistake many people make when choosing a health plan is to look for the most affordable premiums. Certainly, it's important to tamp down monthly premiums as much as possible, but too many people unwittingly risk their health and financial well-being because they don't want to pay higher premiums. The race for low premiums is partly to blame for rescission and other unsavory practices associated with denying coverage. And, on a related note, employers frequently make the mistake that their employees would rather have fewer health benefits in exchange for a pay bump. In fact, according to Employee Benefit Research Institute, 76 percent of employees prefer $7,500 in employer-based health coverage to an extra $7,500 in wages. The best way to control monthly premiums is not to pass over a quality health plan, but to get as many estimates as you can for a plan that works for you and your group/employees.


2. Out-of-Pocket Costs: It's impossible to know whether a health insurance plan and its monthly premiums are of solid value without considering potential out-of-pocket costs. Paying only $5,000 a year in premiums for a family of four seems like a great deal, until you realize that family of four must also pay for the first $10,000 in medical costs. On the other hand, choosing a zero-deductible plan is likely to create eye-popping premiums that both you and your employees will find hard to swallow. Naturally, most employers/group leaders seek out a middle ground, but you need to crunch numbers with the help of a sales representative to make sure you're making a solid choice. To this end, be sure to consider any and all potential out-of-pocket costs from co-pays to upfront deductibles to co-insurance, where insurer and insured split medical costs.


3. Coverage Limitations and Caps: These choices represent some of the toughest and most tedious in the entire process of choosing a group health coverage plan. Do your employees need coverage for dental work? Mental health services? Chiropractic adjustments? Often, you can use the nature of your business as a guide. Employees who work in an office setting that involves long stretches of time sitting in front of a computer may feel particularly appreciative of chiropractic services. Or, in a particularly stressful job, employees may be more likely to covet mental health services. Sometimes, the determination is made that some a cap on health coverage is necessary to reign in premium costs to a manageable level. That said, health insurance caps will soon be a thing of the past. Later this year, health care reform will outlaw lifetime caps and place restrictions on annual caps.


4. Flexibility in Health Care Providers: Signing on to a health maintenance organization (HMO) is one of the fastest ways to reduce premiums without sacrificing explicit health benefits. Yet, despite the cost-effectiveness of these plans, they can be tremendously upsetting to employees who have a long-standing preference for their primary care physician. Moreover, most people savor the ability to talk directly to a specialist about their medical condition without first getting a reference from an HMO-approved physician. Thus, a preferred provider organization (PPO) tends to be a crowd-pleaser in spite of higher costs. A compromise that is growing in popularity, a point of service (POS) plan will allow employees/group members to choose their own doctor and pay only slightly higher rates if that doctor is out of network. However, employees/group members will still need to get a referral from your primary care physician to see a specialist.


5. Where to Shop for Group Health Coverage: Picking the best health plan requires finding the best health plan. This, too, can be trickier than it seems. Although it's not hard to find a plan for group health coverage, it's notoriously difficult to comparison-shop without hours and hours of painstaking research and banging your head against the wall. This is where an online referral service, like NetQuote, comes in. Simply fill out a brief online form, and we'll connect you with multiple health insurance providers that offer coverage for your area. This online form is designed to be just specific enough to allow you to comparison shop, while still allowing you to tweak your policy and review different coverage options with a health insurance customer sales rep. Better yet, once you submit a request for online quotes, the insurance companies will take the initiative to contact you, as you can now carefully consider health plans and policy choices from the comfort of your home or business office.