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Tag: US Group Health Insurance

  • What health coverage MUST businesses provide to US employees?

    What health coverage MUST businesses provide to US employees?

    Health insurance is one of the biggest hurdles for businesses seeking to hire employees in the US.

    There’s no denying that it can be both outrageously expensive and infuriatingly complicated.

    Four out of five (79%) of SME business owners in the US said that health insurance costs risked eating up their profitability, according to a report by Enterprise Bank & Trust.

    Some companies are legally required to provide health insurance to US employees. But even if your business is exempt, employees are likely to expect it anyway – most working age people receive health insurance from their employer.

    In this blog post, we examine the legal requirements placed upon businesses and reveal what US employees commonly expect from their employer.

    Need one-to-one advice related to healthcare requirements in the US? Speak to our award-winning team of international experts for FREE advice without obligation. Call us on +44 (0)1273 974419 or email enquiries@engagehealthgroup.co.uk

    What are the mandatory requirements and who do they apply to?

    Companies with an average of at least 50 qualifying full-time employees (defined as a minimum of 30-hours a week) in the prior calendar year must offer a health insurance plan.

    Under ‘employer shared responsibility’ regulations, at least 95% of full-time employees must be offered “adequate and affordable” health coverage, including to qualifying ‘dependents’ under the age of 26 (i.e. an employee’s son or daughter).

    Failure to meet obligations will see employees hit with a fine which may be greater than what the group healthcare plan would otherwise cost.

    How much coverage should an employer offer? 

    To provide what’s deemed ‘minimum value’, the health plan must cover at least 60% of overall medical costs for a standard (or average) population. Medical costs are calculated based on an estimate of the cost of services likely to be claimed on the plan. The employee then pays the rest of the cost (a maximum of 40%) – BUT, you can only ask an employee to pay up to 9.12% of their household income towards the cheapest health plan you’re offering.

    Under the Affordable Care Act (ACA), a health plan must cover, as a minimum:

    • Outpatient care (hospital services that don’t require an overnight stay, including consultations, tests and outpatient surgeries)
    • Emergency care
    • Prescription drugs
    • Hospitalisations
    • Maternity and newborn care
    • Mental health counselling services
    • Laboratory services (diagnostic tests including X-rays, blood tests and more)
    • Substance abuse services, including counselling
    • Rehabilitation and habilitation services (services which assist with recovery from injury or illness, and disability assistance)
    • Paediatric services (including routine check-ups, vaccinations, oral and optical care).
    • Preventive and wellness services (such as health screenings, vaccinations, and support for chronic conditions)

    Employers can of course choose to add more services such as dental and optical care or birth control.

    What’s the penalty for failing to meet ACA requirements?

    There are two different ways that a business can fail to meet requirements:

    1. They fail to offer coverage to their employees
    2. They offer coverage to all employees but fail to cover enough of the cost

    In the first case, they need to cover at least 95% of full-time employees (those working 30+ hours a week). Failure to do so attracts a fine of $2,880 per full-time employee, as of 2023.

    In the second case, the penalty for an employer that offers coverage that isn’t affordable and/or doesn’t provide minimum value is $4,320 per full-time employee who obtains a premium tax credit in the marketplace.

    Figures are updated each year at the IRS website.

    To receive business-specific advice related to US healthcare and global employee benefits, contact our team of international specialists. Our advice is given free of charge and there is no obligation to take things further. Call us on +44 (0)1273 974419 or email enquiries@engagehealthgroup.co.uk

    What do employers typically offer?

    Almost all multinational companies provide supplementary medical benefits through a Group Health Insurance plan, and approximately 50% of SMEs also offer coverage in this way.

    (Note: the largest companies self-insure, which means they pay for health treatments through their own finances rather than out of an insurance policy.)

    Companies typically buy a US Group Health Insurance plan in one of the following ways:

    Preferred provider organisation (PPO) plan:

    A PPO plan is provided by around two-thirds (66%) of large employers, making it the most common means of purchasing healthcare, according to data gathered by Axco. The employer or the insurer can negotiate fees with the PPO to gain access to a network of hospitals and medical professionals. They can also get access to medical services outside of the network, which makes this a higher cost means of Group Health Insurance in the US.

    High deductible health plans (HDHP)

    HDHP’s are rising in popularity with approximately 58% of large businesses now providing health insurance through it. The employer pays a lower premium, but then has higher payout costs in the result of a claim. This often makes it a better choice for businesses with a younger, healthier workforce who are less likely to make a claim. Emergency and urgent care may be provided outside of the network if it’s with an approved provider, but non-urgent care isn’t covered.

    Health maintenance organisations (HMO)

    An HMO is a lower cost alternative to a PPO, which requires the selection of a primary care physician upon enrolment and in-network coverage only (no coverage out of network).  These can work for regional provider access areas. This means that healthcare is usually restricted to a particular locality, though emergency services can be accessed. Around 18% of large organisations provide a HMO according to Axco.

    Miscellaneous health provisions:

    Other health benefits typically offered by businesses include:

    • Dental insurance (offered by 40% of employers)
    • Optical insurance (25% of employers)
    • Wellness programmes (65% of multinationals and leading local employers, 25% amongst SMEs) – may include EAPs, health screenings, exercise programmes, counselling and more
    • Telemedicine (offered by around 95% of medium-to-large organisations)

    Source: Axco

    What are US employers expected to provide?

    We now understand what businesses are obliged to do, but what are they expected to do? Even smaller companies free of any legal requirement to provide health coverage, may have a commercial pressure to do so explains US healthcare broker, Ed Ligonde:

    “It’s a war on talent right now and if you don’t have a fairly comprehensive benefit package, then you’re going to lose out on the talent you’re looking for.  Employees are looking for a benefits package that helps them both at work and in their personal lives.  Therefore, investing in a benefits package, but also something that’s pretty strong, is becoming table stakes now and expected from applicants.”

    In other words, offering a basic healthcare package to US employees is a minimum requirement if you want to employ capable people.

    “Company health provision ranges in strength from offering only medical, to offering retirement plans, lifestyle benefits, wellness initiatives and dental, vision, life insurance, disability insurance… benefits that promote overall wellbeing,” adds Ed.

    “But medical coverage is the number one driver, since the healthcare system here is at times difficult to understand and pay for that having medical coverage is expected for any employer even with less than fifty employees.”

    Need help navigating the US health market?

    US healthcare is fiendishly complicated for any business expanding into the US. It’s also rather expensive. This means that getting impartial advice from experts is so important. At Engage Health Group we have a team of international specialists ready to field your questions related to US healthcare and they won’t charge you a penny.

    Call us on +44 (0)1273 974419 or email enquiries@engagehealthgroup.co.uk

  • 5 ways to buy Group Health Insurance in the US

    5 ways to buy Group Health Insurance in the US

    US Group Health Insurance is notorious for being complicated, costly, and difficult to navigate. It’s especially challenging for UK-based teams accustomed to a rather simpler – and much smaller – healthcare market. 

    In this article, we explain the five different plans through which you can buy Group Healthcare in the US:

    1. Preferred Provider Organizations (PPO)
    2. Health Maintenance Organizations (HMO)
    3. Point of Service Plan (POS)
    4. High-Deductible Health Plan (HDHP)
    5. Self-Funded Health Plan 

    We explain each of these in more detail to help you understand what may work best for your business.

     

    Need advice on how to best protect your employees in the US? Get FREE one-to-one advice from our expert international brokers on 01273 974419 or email enquiries@engagehealthgroup.co.uk. 

     

    #1 Preferred Provider Organizations PPO 

    Higher cost but a wider network of coverage

    Preferred Provider Organizations (PPO) plans give individuals and families access to a broad network of healthcare facilities, practitioners, and specialists at reduced rates. PPOs usually cost more than other health plans, mainly due to the access they provide to health providers outside of the network too.

    In other words, you’re paying for access to more facilities in more locations.

    Example of a PPO from UnitedHealthcare: 

    UnitedHealthcare’s PPO plan provides access to any doctor, clinic, hospital, or healthcare facility in their national network, and staying within this network will cut down costs. However, if you go outside of the network, costs will become higher and it’s down to you to submit claims. 

    Services include: 

    • Preventive care
    • Physicians 
    • Emergency services 
    • Outpatient care 
    • Lab, X-Ray, and Diagnostic services 
    • Pregnancy and new-born care
    • Prescription drugs 
    • Wellness services 

     

    #2 Health Maintenance Organizations (HMO)

    Lower cost but a more restricted network

    Health Maintenance Organization plans are a lower cost alternative to the PPO, in return for more restrictive services. With a HMO, you are restricted to the network of providers outlined in the plan, meaning you can’t access out-of-network healthcare services (aside from emergencies). Under a HMO plan, you must first go through a Personal Care Physician (PCP) before being referred to a specialist. This inevitably slows down the process of receiving care. 

    Example of a HMO from Aetna: 

    Aetna’s HMO offers a wide choice of providers to offer guided care and the best health services for members. It’s ideal for employers in urban areas wanting to offer a simple and convenient benefit whilst sticking to a guaranteed price range with no surprises. All members can choose their Personal Care Physician (the US version of a GP) to guide their treatment and wellbeing journey towards specialist care. 

    Aetna’s HMO plan includes:

    • In-network coverage only 
    • Preventive care 
    • PCP selection process
    • Available for fully insured customers of all sizes
    • Wellness programmes and apps

     

    #3 Point of Service Plan (POS)

    The best of both worlds option?

    A Point of Service Plan (POS) sits somewhere between a PPO and HMO. You start off by choosing a Personal Care Physician who will then be in charge of referrals to specialists and other services for care, similar to a HMO plan. However, like with a PPO plan, customers can have access to out-of-network services as well. This would at a higher cost though, compared to access under a PPO. 

    Unsurprisingly, the cost of a POS service is somewhere between a PPO and HMO arrangement.

    Example of a POS from Humana: 

    Humana’s POS service combines fee-for-service provider contracts with improved discounts, giving customers access to a broad scope of providers in their network. Its care and services include:

    • Preventive care 
    • Physician services 
    • Facility services 
    • Home healthcare 
    • Urgent care facility 
    • Maternity 
    • Basic mental health, chemical, and alcohol dependency care 

    Struggling to understand the US Group Health Insurance system? We’ll be happy to answer all your questions. Contact our team of international experts FREE of charge on 01273 974419. 

     

    #4 High-Deductible Health Plan (HDHP)

    Lower premiums but higher treatment costs

    High-Deductible Health Plans (HDHP) provide lower health insurance premiums in exchange for higher contributions towards healthcare costs. They are a great alternative plan for a company with younger employees as claims are less likely. However, if claims are being made more frequently, it could end up providing worse value through higher out-of-pocket costs per treatment. 

    Example of a HDHP from Cigna: 

    Cigna’s HDHP is combined with a health savings account which essentially blends traditional medical coverage and care with a tax-free savings account. This savings account is established through the employer to pay for any potential healthcare expenses through tax-free contributions deposited into the account. Then, the deductible is the amount you must pay for eligible health expenses before the HDHP plan provides coverage. 

    Cigna’s services include: 

    • Preventive care in-network
    • Control over spending the benefit dollars
    • Pre-tax dollar contributions 
    • Option to roll over entire health savings account each year without losing it, earning interest tax-free 
    • No referrals needed
    • Online tools and resources
    • Annual out-of-pocket maximum 

     

    #5 Self-Funded Health Plan 

    The flexible option for larger companies

    In a Self-Funded Health plan, an organisation directly insures its employees through its own funds, rather than through a third-party insurance provider. This allows companies full flexibility to choose their administrators, hospital networks, pharmacy plans, and from a selection of all the service providers. This is a great option for companies with more than 75 employees who are young and healthy and unlikely to make a lot of claims. 

    It’s important to note that many businesses going for this plan usually invest in Stop Loss Insurance too. This guarantees that the company has emergency financial back-up in case of higher levels of claims. 

    Example of a Self-Funded Health plan from Blue Cross Blue Shield: 

    Blue Cross Blue Shield (BCBS) offers different levels of Self-Funded Health plans. Organisations finance their own healthcare costs whilst taking full advantage of BCBS’s contracts and administrative services. BCBS offers, on a basic level, two options for two groups: 

    • For groups of 26 or more employees: a choice of several standard design self-funding plans 
    • For groups with more than 50 employees: even more flexibility for custom-designed benefit and self-funding plans

     

    Get in touch with the Engage team 

    Navigating the international health insurance market can be extremely confusing, no matter where your staff are located around the world and it’s incredibly important to be supporting your global teams the best you can. 

    Engage Health Group’s global reach spans 61 countries and territories. Our dynamic team can guarantee the best advice and source you the most competitive quotes in the global health and protection market. Whether you’re looking for a standalone health policy or considering a multi-country global scheme, we are here to help you find the best solutions. 

    Contact us at enquiries@engagehealthgroup.co.uk or call 01273 974419 for FREE no-obligation advice and support.