There Are More Kinds of Health Coverage Than What You’re Being Offered

By Fred J. Meijering, GAIN

AVB partner GAIN (Group & Affiliate Insurance Network) provides affordable healthcare solutions for BrandSource members.

Welcome to the second installment in our eight-part series on demystifying health insurance. Last time we reviewed the five components of any health plan.  In this column we will uncover the different kinds of health coverage that go beyond what your company is being offered.

Implied in that is the possibility that you may not be aware of all of the benefit designs that exist and also the possibility that you’ve never been shown what else is out there.  This could be due to a limited product offering; limited knowledge on the part of your insurance advisor; your advisor’s desire to build volume inside of a particular carrier or plan; or simply limitations on the markets your advisor’s organization wants to offer.

Below is a comprehensive but not all-inclusive list of many of the health insurance products in the market:

  • Fully Insured (easiest but most expensive): Pay one premium monthly regardless of claims volume. Typically has high renewals.
  • Self-Insured (volatile, based on your group’s claims):  Premiums can vary greatly from month to month based on claims volume. Can help with cash flow if claims are stable, can hurt cash flow if claims are high.  Renewals are based on individual group claims volume. This approach is usually for groups with 25 to 50 employees.
  • Level Funded (blend of fully and self-insured): Pay the same monthly premium for the plan year. High claims years can result in high renewals. Can often get a return of unused claims funds at the end of the plan year plus a run-out period.
  • Captive (private, fully owned and controlled by the members or insured):  Can spread high claims years across the captive for reduced renewals. Usually less expensive with lower renewals.  Requires more administrative time to learn the de-bundled program and all the elements of the plan. Can proactively mitigate claims.
  • Limited Med (reduced benefits, reduced price): Offers less benefits and caps on maximums in exchange for a lower premium.
  • MEC (Minimum Essential Coverage, Preventative Services Only): Generally used to get an employee out of the fine for not having health insurance. Very limited benefits.
  • Trust (Multiple Employer Welfare Arrangement, or MEWA; Association Health Plan (AHP); Captive): The back end of these arrangements can be complicated. Requires an association or other entity to put in place and offer to you. The intricacies of this approach are beyond the scope of this article, but GAIN would be happy to answer your questions about it anytime.

Chances are you have not heard about all of these plans. A complete review of all of the options for your group can often result in a better, less expensive plan for your business.

Once again, we at GAIN are grateful to be part of the AVB team. Tune in next month for Part III — “What Determines My Health Insurance Premiums.”

Fred J. Meijering is a GAIN Health Advisor and Captive Manager for Davidson Insurance Services in Addison, Texas. You can reach him at Fred@davidsoninsservices.com.