Controlling the Cost of Group Health Insurance 101

One way Paychex Insurance Agency helps bring clarity to business insurance is through our Insurance 101 topics — providing business owners with quick information in plain language.

If you still have questions after reading our Insurance 101 topics, please call a licensed Paychex Insurance Agency Representative at 877-393-8868. We'll be glad to help you answer them.

Who sets group health insurance premiums?

Health insurance is regulated by individual states, which makes where you do business one of the most important factors affecting group health insurance premiums. Regulations often focus on keeping healthcare costs in check while making health insurance plans available for high-risk participantsRisk factors include pre-existing conditions..

Insurance carriers work within the state regulations to determine premium costs for their plans based on the group's age, health, and lifestyle profiles.

Insurance agencies like Paychex Insurance Agency have no direct effect on the rates you pay, but they can help you save on the group health insurance costs that are under your control.

For more about the current state of health insurance regulations, visit our Healthcare Reform Q&A.

What group health insurance costs are under your control?

Some of the most important factors affecting health insurance costs are under your control, and carriers often structure their plan offerings around them.

• Carrier — Your plan premiums may be higher or lower depending on your choice of insurance carrier.
• Deductible — Plans with high deductiblesThe amount a participant must pay out-of-pocket before their health plan begins paying for covered services. typically feature lower premium amounts, and vice versa. You can choose which plan or range of plans provides the best balance of coverage and affordability.
• Copay — Offering a plan with a higher copay amountThe participant’s share of a payment for a covered service. can reduce plan premiums. Lower copays for participants usually translate into higher premiums.
• Prescription — Prescription coverage may be offered separately from your company's main health insurance plan, or not at all. In most cases, the more your prescription coverage pays for generic to highly-specialized name brand medications, the higher the premium amount.
• Hospitalization — As with prescription coverage, a specific hospitalizationAny treatment that requires a participant to stay overnight at a hospital or other medical facility. policy may be offered separately from your main health insurance plan, or not at all. Hospitalization policies provide cash benefits beyond your company's health plan; the more coverage you choose, the higher the premium.

How can Paychex Insurance Agency help you control costs?

The more options you have when choosing an insurance plan, the closer you can match the insurance needs of your business and employees to your budget. Paychex Insurance Agency provides you with the options you need to address the major factors affecting the price of health insurance.

• Carrier — Choose from local, regional, or national carriers in your area. Paychex Insurance Agency partners with over 150 carriers nationwide.
• Deductible — Our carrier partners offer plans with varying deductible amounts to help you balance your plan’s coverage and premium amounts.
• Copay — Many of our carrier partners also offer plans with higher or lower copay amounts to further balance coverage and premium amounts.
• Prescription — The ability to choose prescription coverage separately from your main health insurance plan gives you even more options to control your health insurance costs. Paychex Insurance Agency partners with multiple carriers in your area, with multiple plans, so you can find the right combination of health insurance and prescription coverage.
• Hospitalization — Paychex Insurance Agency gives you the information you need to decide whether to offer a hospitalization policy, and if you do, which policies work best alongside your health and prescription coverage.

What are the types of group health plans?

The two most popular plan types are known as a Health Maintenance Organization (HMO), and a Preferred Provider Organization (PPO), but there are four main categories which affect what you play for health insurance.

• Health Maintenance Organization (HMO)
  An HMO is a group health plan in which physicians and medical personnel can either work directly for the HMO or under contract to provide medical care to its members. Usually, a primary care provider must be chosen to provide and coordinate your care. There is often an emphasis on disease prevention and participation in programs for better health.
• Preferred Provider Organization (PPO)
  In a PPO, policyholders can use any medical provider in the PPO network and pay the co-payment amount for each regular service. If you choose to go to an out-of-network provider, you must often pay the doctor's fees directly and file for reimbursement from the insurance company at a greater cost. For that reason, the PPO system encourages its policyholders to see doctors and health providers within the system.
• Point of Service (POS)
  POS group insurance acts as a combination of an HMO and a PPO. You must usually use a primary care provider, but you can use other network health providers, when needed, without a referral. You may also use providers outside the network without a referral, but you will pay more.
• High-Deductible Health Plan (HDHP)
  The HDHP features higher annual deductibles for single or family coverage than other traditional health plans. The maximum out-of-pocket limits for HDHPs are also higher. Depending on the HDHP you choose, you may have the choice of using in-network and out-of-network providers. Using in-network providers will save you money. With the exception of preventive care, you must meet the annual deductible before the plan pays benefits. Preventive care services are generally paid as first dollar coverage, or after a small deductible or co-payment. A maximum dollar amount may apply.
• Health Savings Account Qualified High-Deductible Health Plan (QHDHP)
  Enrollment in a QHDHP is required in order to make deposits into a Health Savings Account (HSA). For a high-deductible health insurance policy to qualify, the deductible and annual out-of-pocket expenses must meet specific IRS guidelines.

How much coverage do you need?

With many different types of group insurance offered through different carriers, it can be difficult to know exactly which plan will ensure that you and your employees have the appropriate coverage — without making you pay for benefits you don't need. Talk with a licensed Paychex Insurance Agency Representative at 877-393-8868, and we'll take your business size, location, industry, and more into account to help you understand the coverage you need, and how to get it.

What is a Consumer Directed Health Plan (CDHP)?

A CDHP, such as a Health Savings Account (HSA) or Health Reimbursement Account (HRA), allows employers, employees, or both to set aside pretax money in order to help employees pay for qualified medical expenses not covered by their health plan.

How can Paychex Insurance Agency help create a benefits package that meets the needs of your business and budget?

Our licensed representatives will discuss your situation and needs in-depth in order to help you understand your group insurance options. When you've chosen a plan and become a client, you will receive even more services to help you manage your plan moving forward. These include:

• A designated client service specialist.
• A welcome call and welcome packet with policy information and a guidebook.
• Setup of your new insurance account.
• Contribution calculation and initial deduction setup.
• Enrollment assistance.
• Reports that track employees' eligibility and enrollment status.
• Premium deduction management for new hires, qualifying events, or status changes.
• Coordination with your carrier.
• Shopping for alternative plans at renewal time.

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