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Reading the Fine Print of Group Health Insurance Rates

Understandably, group health insurance rates are the first thing employers look at when choosing a health plan for their company and employees. Group health rates are spiraling upward at an alarming pace. According to a Commonwealth Fund report, average, annual premiums for employer-based family health insurance coverage went from $5,612 in 1999 to $12,290 in 2008. Worse, current forecasts for health care costs predict that family health insurance premiums will average $23,842 in 2020. Yet, as important as tamping down costs seems, you can't race to the bottom and hope to find health coverage that protects your employees' health, finances, and even workplace productivity. Reading the fine print of group health insurance rates—and making a solid purchasing decision—requires a lot more than the cost figure associated with annual premiums. Here are some of the most important details to look at before making any final decisions.

How to Read the Fine Print of Group Health Insurance Rates

The first step is to take a comprehensive look at all cost measures—both upfront costs and potential down-the-road costs—including premiums, deductibles, co-pays, co-insurance, and annual caps. Unfortunately, there is no silver bullet to know when high deductibles and co-pays outweigh lower premiums. The best choice for one employee is unlikely the best choice for another employee—forcing everybody into one-plan-fits-all strategy is precisely why group health insurance rates are lower than individual plans. Naturally, most employers look for a middle-of-the-road choice, but many health insurance companies are undoubtedly aware of this tendency and may price such plans in a way to maximize their profit.

Beyond costs, you need to consider versatility of certain health plans. Health maintenance organizations (HMOs) aren't going to be popular in the office if they exclude the most popular primary care physicians. But rather than opt for more expensive preferred provider organizations (PPOs), many employers are choosing a new type of health plan: Point of Service (POS) plans will allow your employees greater latitude when choosing their primary care physician, though other policy restrictions—needing a referral to see a specialist, for example—more closely resemble HMO plans. Finally, no online guide or health expert can possibly prepare you for every possible policy detail, exclusion, or catch included in the fine print of specific policies. As such, you need to treat your health insurance plan like you would any other critically important contract by reading every word of the document.

Group Health Rates and Employer/Employee Contributions

Once you have a handle on the fine print of your group health insurance rates, you'll need to decide what percentage of the premiums you will pay and what percentage your employees will contribute. Often, this decision can be even more stressful and complicated than choosing the group health rates themselves. How much money you ask your employees to pay will almost surely affect how many employees decide to decline enrollment, either because they feel they don't need it or, more likely, they can get superior coverage through their spouse's plan. According to a 2003 study from the Agency for Health Research and Quality, employers who didn't require an employee contribution saw 87 percent of employees enroll in the employer's health plan. Employers who required employees to contribute to the cost of the plan saw only 77 percent of employees enroll in the plan.

On a similar note, you will need to decide whether you will partially compensate employees who deny enrollment. Despite the fact that each employee who declines enrollment is likely to save you thousands of dollars, most employers refuse to compensate employees in this manner. Indeed, if you have too many employees decline your health plan, your policy may get reclassified and premiums will go up as you end up paying small group health rates. Moreover, if your policy is like most offered by group health insurance companies, you should warn employees who decline coverage that if they change their minds, they will have to wait until the policy is renewed before they can join the plan.

Finding Group Health Insurance Rates Online

In order to read the fine print of your group health plan, you must first find several, reliable group health insurance companies to get quotes from. After all, few employers have the time to read the fine print of half a dozen different plans. The best way to do this is with an online referral service, like NetQuote. Finding these quotes online helps group health insurance companies further reduce overhead and, thus, helps them offer lower group health rates. Plus, by taking just a few minutes to fill out an online request form, you can sit back and let these companies take the initiative to contact you, giving you more time to consider the fine print of the policies themselves.

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