Column: A lot to learn in health insurance

Courtesy photo

Write a Comment

By Stephen P. Carey

Seventeen years ago when I joined Polar Beverages as human resource manager, employees paid no weekly premiums and the employee had unlimited choice as to where to obtain medical services. In my second year at Polar, the company instituted a $1.00 per week health care premium. Based on the employee reaction, one would have thought that the world was coming to an end.

The family plan cost Polar approximately $425.00 per month in 1999, as compared to the $1,500.00 per month charged today. Some plans cost much more.

Today, employees are responsible for sharing these rising costs through deductibles and office, specialist and procedural copays. Prescription drug costs are increasing at a rate of 10 to 20 percent per year. Some health plans have 80/20 programs where the employee is responsible for 20 percent of the medical bill. Hospital charges differ widely; the same service can be two to three times higher from one place to another.

In addition to these changes, the federal Affordable Care Act has created new laws and requirements for employers. Benefits managers who do not understand the requirements will have difficulty communicating that information to employees. A smaller company may not have the benefit of a full time benefits coordinator, and instead, will give that responsibility to an employee who has many other responsibilities. That person may not have the time to spend on employee education and communication. Employees may be unaware of the extra costs and time it takes a company to comply with the new rules and regulations.

That doesn’t work well in today’s complex health insurance marketplace. The employer has a major role in educating employees and making sure they understand the financial impact on a company for the services they choose. If that educational resource is not available in-house, it’s time to seek a specialist – a health insurance broker.

A good broker will have a positive impact on the company and its employees. Brokers are knowledgeable about the various health plans and insurers, financial impacts and industry rules and regulations.

Every year businesses hold their breath on their renewal waiting for their new rates. If it has been a good year with low claims, you may get no increase or slight one. If it is the opposite, you could get a rate increase as high as 15 to 20 percent. It is important to hold quarterly reviews throughout the year to understand how your plan is running. This is where a good broker can help you.

(sub)Health Care 101

Over the years, Polar has expanded and grown up and down the East Coast, New York and out to the Midwest. Within our health Insurance, there are several different types of plans – a Health Reimbursement Account (HRA), a Health Maintenance Organization (HMO) and a Preferred Provider Organization (PPO) depending on the location of our employee. I will focus on our strategy within Massachusetts.

Four years ago, Polar switched from a PPO to an HMO with a tiered program. Just to clarify, A PPO gives more flexibility of choice without the need for a referral from a primary care physician. An HMO is more restrictive, requiring referrals for medical services and a different cost structure depending on what tier the doctor or hospital falls within. The employee’s out-of-pocket cost could range from $50 to $2,000 for services requested a different hospitals.

When the choice was made to change over to the HMO Tiered Plan, in 2011, all healthcare meetings for employees were mandatory. Within a six week span, the company held a total of 35 meetings, in the mornings, at night and on weekends, to explain the changes for Polar’s October renewal date. During this time, Polar also worked with Worcester-based Saint Vincent Hospital offering concierge services. To this day, this benefit is in place to help employees decide where to obtain services and to determine and control out of pocket costs.

Keep in mind that the cost of doing business at a higher cost hospital will reflect on the company’s renewal for the following year. Polar Beverages’ aim is to provide the highest quality service at the lowest price. Employees are free to choose what hospital and services with which they are comfortable. The HMO is a 3 tiered program. Employees can choose one of the three tiers based on how much they want to pay out of pocket. The tiers are priced relative to the cost of services at particular hospitals. If they choose to pick a tier that involves a higher-priced hospital, it will cost the company more money. An educated employee will help keep costs down for the company and themselves.

An ounce of prevention

Polar has a Health and Wellness Fair in the fall along with the mandatory meetings for the employees. We reach almost of 100 percent of our employees. The Fair offers screenings for diabetes, blood pressure and cholesterol. We have several different types of vendors and specialty programs from hospitals. By providing the employee with information on health and wellness, our goals are disease prevention and company cost control.

Polar is taking steps to increase Health and Wellness participation by offering incentives for employees to get yearly physicals, age-related testing and to take a more active role in their health and wellness. With Polar’s 2016 renewal, employees will get rewarded on participation in the plan throughout the year.

We do our best to educate and communicate with employees. It is not up to the hospitals, doctors or medical facilities to know the programs -- it is up to the employee to be responsible for their health care and the costs associated with it.

At Polar, Ralph and Chris Crowley, along with COO Mike Mulrain, have always believed that we need to offer a quality health insurance program to all our employees. Education and guiding the employee is the key to cost control and employee satisfaction.

Stephen P. Carey is vice president of human resources at Polar Beverages in Worcester.