What enterprises need to know about purchasing employee health insurance

For more than a few business leaders, procuring employee health care packages can be an intimidating prospect. Obligations incited by the Affordable Care Act are somewhat befuddling, especially considering that the law is well over 1,000 pages long.

Politics aside, businesses need to find a healthy balance of cost-effectiveness and quality - they want to provide their workers with reputable insurance, but they don't want to break corporate budgets, either. After all, if a company goes under due to exorbitant internal expenses, its personnel will be forced to purchase health care plans independently. 

What does the ACA mean for health care procurement? 

Not all of the mandates within the ACA apply to every company. For instance, in 2015, employers with 50 employees or more will "have a responsibility - but no mandate - to offer employees health coverage," according to National Public Radio. The news source expanded on the issue by saying that if companies within this contingency do not offer insurance, they will be subjected to fines if their workers approach health insurance exchanges and earn wages low enough to "qualify for federal subsidies." 

Overall, NPR maintained that many large companies are encountering rising costs as an indirect result of the ACA. As a result, many employers are distributing the cost of purchasing insurance across their staff. Apparently, the average annual deductible for a single worker doubled between 2006 and 2013, rising from $584 to $1,135, respectively. Due to this contradiction in regard to the objective of the ACA (that is, reducing health care costs), employers are struggling to purchase care packages that won't require them to increase yearly premiums further. 

What's the best course of action? 

Set expenses aside for a moment. First off, businesses should consider the type of industries they're participating in when acquiring health insurance for their employees. For example, it makes sense for a construction firm to procure a plan that provides excellent accident coverage. On the other hand, a software company likely wouldn't derive any value from such a package. 

With this in mind, former Blue Cross of Rhode Island CEO Jim Purcell wrote a piece for IndustryWeek detailing what organizations should be mindful of when procuring employee health care. In the blog, he emphasized the need to scrutinize the well-being of the average worker - are personnel generally healthy or unwell? Insight from the financial and human resources departments can inform providers of what particular services they're looking for in a plan. 

Know what you're paying for 

This should go without saying, but demanding a transparent contract during the request for proposal process is critical. No matter how lengthy a contract is, every detail within the agreement must be dissected and hashed out. In addition, insurance providers must be willing to go "above and beyond" - connecting employers with physicians, hospital and other care professionals within their networks. 

"Employers must demand that insurers make health care price, quality and outcome information easily accessible for employers, employees and physicians on their websites and by telephone," wrote Purcell. "For example, for an open heart surgery procedure, insurers should provide price and quality/outcome measures on all hospitals providing such services within 100 miles."

As always, when negotiating with an insurance provider, speak with their customers. This doesn't mean asking them for a list of enterprises with which they've established relationships. If necessary, hire a team of benchmarking experts to conduct an outside investigation. While this may appear somewhat nefarious, you're the one in charge of providing quality care to more than 1,000 employees - aggregate information from any sources you can find. 

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