It’s late at night, open enrollment closes in 6 hours, and your newly founded, soon-to-be-a-unicorn startup still doesn’t have a healthcare plan.
You and your coworkers don’t get sick all that often, so you feel like you shouldn’t spend on a cushy plan, but you also don’t want to lose out on a ’10x’ hire because your health coverage sucks. A Google Search later and you’re awash in a sea of acronyms — HMO, PPO, HSA, HRA, HDHP, PCP (not the drug). Who ever thought that giving doctors money could be so hard?
So what do you do? How do you figure out what matters? What plan should you pick?
Types of Plans
The first thing to know is that plans are bucketed into one of four different ‘metal levels’, each tied to a different level of coverage: Bronze, Silver, Gold, and Platinum. Platinum has the highest premiums and the lowest out of pocket cost for your employees, while Bronze has the lowest premiums, and a higher out of pocket cost for your employees.
We certainly don’t want to stereotype, but startup employees tend to be young, healthy, and without families. In other words, they won’t be interacting with the healthcare system all that often. For this reason, plans at the Bronze level make the most sense for startups. These plans have super low premiums, but they have very high deductibles. Deductibles are the amount that your employees have to pay out of pocket before insurance kicks in. This makes Bronze plans great for people that don’t have severe chronic conditions, but worry about things like car crashes or the flu.
In other words, Bronze plans make sense for startups.
Even though most of your employees likely won’t come anywhere close to hitting their deductible, you probably want to make sure that your employees who need regular interaction with the healthcare system don’t feel like they are poised to drown in medical bills.
HRAs & HSAs Keep People Happy, and Costs Low
This is where HRAs come in. HRAs, or Healthcare Reimbursement Arrangements let employees submit their medical bills to the employer for reimbursement up to a particular amount. The employer may contribute however much they’d like into the arrangement, and the contributions are tax deductible too — further keeping healthcare costs low.
You might hear of HSAs too. HSAs are essentially the same as HRAs, except they are an account paid into by the employer that accrues value over time. HRAs are generally better for the small employer, because they are easier to administrate, and allow the employer to have greater control over healthcare costs.
Having a HRA lets you support employees who need regular interaction with the healthcare system while refraining from over insuring everyone else. This is crucial for retaining and attracting all-star employees who may have chronic conditions, or otherwise need to interact with the healthcare system a lot.
Here’s a crash course on how to set one up.
Plan Types
Finally, you’ll need to choose between plans that are HMO, PPO, and EPO.
HMO plans require your employees to visit their ‘Primary Care Provider’, or PCP, before seeing a specialist. This may frustrate your employees, particularly if they are of the sort that like to take control over their health. It also wastes lots of their time, as they have to take time to make two separate appointments just to treat one issue.
PPO and EPO plans give employees flexibility when it comes to seeing specialists — you don’t need a referral from a PCP, and you can see any doctor you’d like. PPO plans designate a certain set of doctors that are ‘in network’, and charge employees more out of pocket if they see an ‘out of network’ physician. EPO plans are like PPO plans, but more strict: they provide no coverage for physicians who aren’t in network.
Based on a sampling of people I know working at startups, it seems most people prefer PPO and EPO models. They don’t want to have to go through the hassle of seeing their PCP before going to a specialist, as they feel they are generally well educated enough to make that sort of decision on their own.
The Verdict
This leaves you with a few good options:
- United Healthcare Bronze EPO HSA
- Anthem Bronze Select PPO 6500/0%/6500 w/HSA
- Blue Shield Bronze 60 PPO 6300/75
- Healthnet Bronze 60 6300/75 PPO + Child Dental
The last and perhaps the most important aspect of picking the plan that’s right for your employees is the coverage network of the plan. A plan’s network is the set of doctors who accept that plan’s insurance. Most likely, your employees already have doctors that they have ongoing relationships with, and it can be a major hassle to force them to change to a new doctor.
In order to pick the best plan for your employees, send an anonymous survey asking them for their preferred networks — Aetna, Blue Shield, etc. From there, it’s easy to whittle down the perfect plan for your company. Just figure out the network that your employees prefer, and choose a plan from the above!
Saving $$$, Keeping People Happy
There’s one last hack you can use to save money and keep your employees happy when it comes to providing healthcare: telemedicine.
Telemedicine is a rapidly growing field of medicine that lets people talk to doctors anytime, anywhere, and get prescriptions too. The American Medical Association estimates that about 70% of all health concerns are treatable over telemedicine: things like rashes, burns, UTIs, and more.
The trouble is, most telemedicine platforms are a hassle to use, employ subpar doctors, and don’t allow you to build a relationship with a doctor that knows you well, instead matching you with a random doctor every time you have an appointment, which is pretty risky.
Services like Remedy let patients get treated by world class doctors for only $30 an appointment — less than most people’s copay, and certainly less than the cost of an appointment on a high-deductible plan. Patients can talk to their physicians anytime, anywhere, over a HIPAA compliant messaging interface. If your employees spend on Remedy, and it’s paid out of an HRA, the expenditure is tax deductible.
Plus, telemedicine services are super convenient, meaning people won’t think twice about using it, leading to earlier detection of serious diseases like cancer. Employers can talk to their employer about using platforms like Remedy and partner with them to provide care for all their employees at discounted group rates.
Originally published at remedymedical.com.
