12 Tough Questions to Ask your Agent
- What is the coinsurance limit? What is the total annual out-of-pocket cost for covered services?
- What happens if I go to a doctor or hospital that’s not on the “preferred” list?
- Are managed care discounts passed along directly to members?
- Can employees pick a plan design?
- Are customer service people available in the evenings or on weekends?
- Is the carrier’s utilization review program accredited?
- If I have a significant illness, will I get to talk to the same nurse every time I call the insurance company, or will I talk to someone who uses their computer to check what’s been done up to that point?
- Will I have to fill out claim forms?
- What is the carrier’s A.M. Best rating?
- What happens if I want to hire someone who has a recent history of significant illness or who is currently undergoing treatment?
- How much experience does the carrier have dealing with small businesses (fewer than 10 employees)?
- Do they handle other employee benefits that I need?
What is the coinsurance limit? What is the total annual out-of-pocket cost for covered services?
Most managed care plans require their members to pay a small percentage of the charges beyond the deductible, up to a point. For example, you might pay a $500 deductible, plus 10% of the next $2,000. Your deductible plus your coinsurance limit is the point where your health plan takes care of all covered charges - - in this case $2,500 - - up to any policy limit. And your out-of-pocket maximum for any year is the deductible plus 10% of $2,000 - - or a total of $700.
What happens if I go to a doctor or hospital that’s not on the “preferred” list?
If you’re in a health maintenance organization (HMO), you probably have to pay on your own for any medical care from doctors or hospitals not on the list (or “panel”) for your HMO. While you lose freedom in an HMO, you gain a lot more benefits for the money. Many other types of managed care health plans, however, provide some coverage for care from doctors and hospitals not on the preferred list. Preferred provider organizations (PPO) do this, often requiring the member to pay a higher coinsurance percentage - - say 30% instead of 10% - - for out-of-plan care. This results in a higher out-of-pocket maximum for that year. Another type of plan is an “elect provider organization” (EPO), in which, as with an HMO, members designate their primary care physician as a “gatekeeper.” But unlike an HMO an EPO provides some coverage for out-of-plan care, in the same way a PPO does. An EPO is sometimes called a “point-of-service” (POS) plan.
Are managed care discounts passed along directly to members?
Managed care companies in most cases negotiate price discounts with doctors and hospitals. Your surgeon may have a “list price” of $2,000 to perform a minor surgery, for example, but he or she may have an agreement with your insurance carrier to charge only $1,500 for its members. Make sure your out-of-pocket expenses are based on the discounted price. Some carriers would pay benefits as if you paid list price. That is, they expect you to pay 10% of $2,000, even though the actual charge was only $1,500.
Can employees pick a plan design?
These days, even the smallest of businesses can often get a health care plan in which individual employees can select from a menu of benefit options, including deductibles and coinsurance percentages. In many cases each employee can even pick for him or herself whether to go with an HMO, EPO or PPO.
Are customer service people available in the evenings or on weekends?
Make sure the carrier answers that 800 number when it’s convenient for you.
Is the carrier’s utilization review program accredited?
Most managed care plans require members to check with a nurse at the insurance company before checking in to the hospital, or when incurring managed medical expenses. This is known as “utilization review” (U.R.) Make sure your plan’s utilization review program is accredited by the Utilization Review Accreditation Committee (URAC), a national standards board that reviews U.R. systems to safeguard consumers.
If I have a significant illness, will I get to talk to the same nurse every time I call the insurance company, or will I talk to someone who uses their computer to check what’s been done up to that point?
As part of the utilization review process, many carriers employ “case managers.” You’ll want to be assigned to one case manager if your case gets complex and expensive. You’ll come to appreciate this nurse’s familiar voice, and the fact that she or he knows you, your situation and your local health care scene.
Will I have to fill out claim forms?
Some carriers require members to fill out claim forms, while others simply have their members show an ID card that allows the clinic or hospital to take care of all the paperwork. We recommend the latter.
What is the carrier’s A.M. Best rating?
An “A” (excellent) rating from the independent insurance rating firm A.M. Best Co. is a positive indication that the insurer will have the money to meet its obligations into the foreseeable future.
What happens if I want to hire someone who has a recent history of significant illness or who is currently undergoing treatment?
Ask whether your carrier offers “portability,” meaning a person currently undergoing treatment or who has recently been treated will not be prevented from getting coverage for the at condition under a pre-existing condition clause, assuming they are transferring over from another health plan. In some states portability is required by law. In other states some carriers offer portability voluntarily.
How much experience does the carrier have dealing with small businesses (fewer than 10 employees)?
Small businesses have special needs because they generally don’t have a personnel department or benefits mangers. If you’re in a small business, you need to think of your carrier as your benefits manager. Make sure their experience shows they’re up to the task.
Do they handle other employee benefits that I need?
- Dental plans are becoming a “must” to attract the very best segment of the labor pool. Now small businesses can easily set up flexible spending accounts (Section 125 plans) that allow employees to pay for things like uncovered medical costs, vision care and daycare using pre-tax dollars. This can often be done at no cost to employers. Group term life policies are becoming a very popular and very affordable employee benefit. Make sure your health carrier can provide all of these benefits - - if not today, as your business grows.