Alternative Healthcare Options: Private Insurance
Private insurance alternatives to COBRA: Most name-brand insurance companies sell individual and family health insurance policies in the private market, which is generally referred to as the individual market. Employees in good health may find some great deals in the individual market. Encourage employees to follow this advice when considering private health insurance.
How to Find Private Insurance Alternatives to COBRA
- Shop for private insurance in the biggest marketplace available - the internet The best place for your employees to start looking for private insurance is online. An online broker is likely to represent the largest number of carriers and widest variety of plans available in your state.
- What should your employees know about shopping online? Protect their private information: Be sure your employees know that any online broker requiring their contact information before they provide a quote is likely to sell that information to another broker. Those brokers will then reach out to your employees directly to try and sell them a policy from the carriers they represent.
- Where should employees go for advice on private insurance? As you know, employees are used to depending on you and your expertise when it comes to choosing plans. Now that they’re on their own, they need to replace you with an expert, and a licensed agent is their best alternative.
- What should your employees know about brokers and agents?
--You can’t escape commissions. Your employees won’t save money buying directly from an insurance company. Agents or brokers do get paid by commission, but the insurance companies have already rolled that commission into the price of any policy they sell.
--Use a licensed agent. Licensed agents – online or off - know how the world of health insurance works and may be able to find your former employees discounts or plans that are more likely to insure certain health problems.
--Find out who the agent represents. No matter what type of broker they use, be sure they check to see how many insurers they represent, so that your employees know they’re receiving information about the largest number of plans available in your state. - How will employees know what to buy?
The key to buying insurance in the private market is shopping smart, and buying only what you need. Make sure your employees understand the difference between buying a major medical plan – most individual and family plans are major medical plans – and catastrophic coverage.
--Major medical coverage: Major medical insurance will cover a wide array of medical expenses; more complete coverage with fewer gaps – including those incurred both in and out of the hospital – with generally higher individual benefits and policy maximum limits.
--Catastrophic coverage: A catastrophic insurance plan is likely to have a very limited set of benefits and, in some cases, may only cover visits to the hospital in an emergency. - What elements should your employees look for in a major medical plan?
When considering a private plan, your employees need to consider the following three things.
—Out-of-pocket limits: This is the consumers’ maximum financial exposure in case of a catastrophe. Employees should be sure that, in case of a catastrophe, they can handle the maximum out-of-pocket limit on their plan. Most out of pocket limits range from $2,500-$10,000. It is possible to set up payment plans if an expense can’t be paid in one lump sum.
--Plan life-time maximums: This refers to the maximum dollar amount that a health insurance company agrees to pay on behalf of a member for covered services during the course of his or her lifetime. It’s a good idea to have a minimum of $2 million of life-time maximum coverage on a plan.
--Provider networks: Most plans offer a network of providers through which services are provided at a lower discounted/contracted rate. Services by non-network providers are rendered at a higher rate and sometimes may not be covered at all. A larger provider network will allow your former employees to get the care they need at a good price.
It may take a little more work, but it’s important to be sure you’re providing your former employees with all of their options when it comes to finding health insurance. For the unemployed, every dollar counts: especially in this economy. Finding the right healthcare plan for them, while also making the best decisions for the success of your business and your remaining employees, should be imperative.
