Audio Transcript: The Health Plan Edge 001, Selecting the Right Plan

Steve Strauss: Welcome to the Health Plan Edge, the podcast that makes it easier for small businesses to navigate health insurance. I'm your host, Steve Strauss, USA Today small business columnist and author of the Small Business Bible. In each episode we share real small business stories and strategies that make health plan decisions easier for you.

We [00:00:30] have a great topic for you today. Namely, it is one that we as small business owners think about a lot, which is how do I select the right plan for my business? To help us figure it out, I got two great guests. Paul Sharkey is a former benefits consultant who now advises small business for UnitedHealthcare. And Neal Marco owns Strive Pest Control 20 miles outside of Manhattan with seven employees, and he currently offers health insurance [00:01:00] to all of them. Welcome both of you to the show.

Paul, let me open with you and ask you this. This is really the $64,000 question, which is how do you figure out the right plans as a small business owner?

Paul Sharkey: Good morning Steve and thanks for having me. For small businesses there's so many things that they're having to consider and deal with throughout their busy days. Health insurance is definitely one of those big ones that they have to figure [00:01:30] out, and really, trying to figure out the right plan for a small business can be different because even if you only have seven employees like Neal, all of them have many different needs, especially when it comes to accessing the healthcare system and what's going to be right for their family.

One of the things that I would recommend is looking to an insurance carrier that's actually able to offer them a number of options for their [00:02:00] employees that doesn't lock them into just choosing one plan, but giving them multiple options to meet the needs of each of those employees.

Steve Strauss: Then what are the key considerations when you're looking at these different plans? What kind of components should a small business owner be considering?

Paul Sharkey: With health insurance being usually the second biggest item outside of payroll that a small business owner has to contend with in terms of budgeting, first off is cost, right? What are the options that are going to meet [00:02:30] the budget of that employer, and then what are you getting for that cost? Are you getting a big national network of health care professionals to choose from, or based on the needs of your population would a smaller, narrower network work for the employees that work for you?

Also, based on the cost that you're reviewing from the health insurer, what type of base planning offering can you give to employees that matches up with your budgetary needs, and [00:03:00] then maybe give the employees the option to buy up to additional plans and coverage if they need more for their family.

The way that you get to those different factors within health insurance is really looking at the richness of the benefit. What's the deductible involved, and then what's the premium associated with that deductible that you're going to have?

Steve Strauss: Right, exactly. I think one general formula that really can make it easy for people [00:03:30] to understand is namely this, that higher premiums mean, generally, lower copays and lower co-insurance pays, and vice versa so that the more you pay each month the less you'll pay per doctor visit. So if, for example, you go with a high premium and a low copay, you would do that if you need health care pretty often. But if you're young and healthy and you don't go to the doctor very often, you would go with a low deductible and low premiums and higher copays.

Paul Sharkey: Yeah, I totally agree. Basically, [00:04:00] what you're going to do is try to figure out for that employee population if people are higher utilizers like you're saying, then they're going to want a richer benefit level, lower copays, less out of pocket costs. And the premium for those plans is going to be higher. Then for your lower utilizers in your employee population, you'd look to offer them a high deductible plan that would have lower premiums but might be offset if you're able to tie a [00:04:30] health savings account to it where employees can actually put in money on a pretax basis and then spend it tax free on eligible health care expenses.

Steve Strauss: Right. Neal, in fact, let me turn to you. Not to disparage our beloved New York, I love New York as much as anybody else but I bet being in the pest control business not far out of Manhattan you have plenty of work. Why don't you tell us a little bit about your business, and in fact then how you go about selecting the plan for your business [00:05:00] and your employees?

Neal Marco:Thanks, Steve. Thank you for having me. First of all, my business is basically commercial pest control up here in northern New Jersey and the suburbs of New York.

Steve Strauss: And how did you go about selecting the right plan for yourself, your business, your employees? What was that process like?

Neal Marco:Well, Steve, there's not a lot of information out there, so I did a lot of Google searches and did some comparisons on my own.

Steve Strauss: Paul, I think Neal makes a really good point. It isn't easy, often, [00:05:30] to figure this out. So do you have any expert recommendations of what people can do when trying to figure out what plan is right for them?

Paul Sharkey: Sure thing, Steve. There are a number of options out there, and I think we addressed one already, which would be speaking with a broker or a health benefits consultant. They know the market, they know the plans, they know where the best cost is going to be for small business employers.

Another option would be utilizing [00:06:00] the internet. I know, for example, UnitedHealthcare has a very robust digital store for small business employers, as do many of our competitors. So I think those would be two of the top things to do.

Then also, while you're online, there are a number of resources whether it be through the Kaiser Foundation or even Healthcare.gov where you could also go and get information on what [00:06:30] plans are available to small businesses.

Steve Strauss: Paul, could you just drill down on this idea of the store a little bit, for whatever provider you're choosing? They probably walk you through a process of how to choose, right, when you get on to these different tools?

Paul Sharkey: Correct, Steve, and it's pretty interesting. We've noticed that many of our small business prospects, employers, are coming to us all hours of the day. Some of the highest traffic we see on our digital store [00:07:00] is well after normal business hours, and again, we talked about that. Neal's got a lot of other things going on during the business day, and here's a way to go on after work when you have time to really sit down and look at it and look at different options where, you're right, the store's going to walk you through this experience of asking you some questions about your organization, about the employees that you have working for you. You put in a few bits of data and then in response [00:07:30] to that you're going to get a number of plan options from that insurer, at a number of different price points for you to consider.

Steve Strauss: I'm wondering, what were the most important parts of the plan that you were looking for? What did your staff need that you were looking to give them when you chose your plan?

Neal Marco:Well, that's sometimes is a little bit rough because you don't want to be too invasive in people's privacy, but the one thing that hurts is if I chose a plan and all of a sudden somebody loses their beloved doctor. That's always a very big [00:08:00] challenge.

Steve Strauss: Paul, let me ask you this then. I would guess that the composition of the work force affects the choice, whether you have younger employees versus older employees, those who need special things versus those who may not. How does the composition of the work force factor in?

Paul Sharkey: Steve, the composition of the work force does have a big impact on the overall plan and cost of the plan. Based [00:08:30] on the way fully insured rates are created in the small group market right now, they're based on age and so your older employees actually would see a higher premium compared to your younger employees. So that does make it challenging. What I would say, it's definitely important then to try to find not just one plan, if possible, for all employees and [00:09:00] really try to give those employees options at different price points that are going to make the most sense for them and their family.

Steve Strauss: That's really an important point to underscore, I think, that you don't just have to offer one plan and this is the plan, take it or leave it, but you can have a silver plan, a bronze plan, a great plan, a lesser plan, right? And then let them make those choices.

Paul Sharkey: Couldn't agree more. Usually, as Neal was saying, there's so many other things that Neal's dealing with in any given day. Sometimes it's hard [00:09:30] getting those communications out to employees. Really having a resource, whether it be a broker or going to your insurer's website and getting the members engaged on the member portal, really important to start having them take more health ownership and getting involved in the benefits, and the different offerings that they have for that premium they're paying.

I think the good news here for small businesses is that they have choices. You [00:10:00] can choose to use a digital platform and access plans, benefits and costs directly. You also have the choice to utilize an expert, a health insurance broker, a benefits consultant who can help guide you to those decisions as well. The good news for small businesses in a fully insured environment is that the cost is going to be the same from a premium perspective.

Steve Strauss: Why might someone want to do it themselves?

Paul Sharkey: [00:10:30] That's why they're in small business. They are innately driven to do it themselves, and they're entrepreneurs. If they have the time and the knowledge base and that comfort of wanting to go directly to a digital platform or directly to an insurance carrier, that's part of the reason they're successful today in running their own business.

Steve Strauss: Point well taken. And that is a wrap, I think. Neal, do you want to say anything to that?

Neal Marco:I just want to say that's why we have these conversations, that's why [00:11:00] you always research, and that's why you speak to like minded individuals, so you could learn something for the future.

Steve Strauss: Well, unfortunately we are out of time. I hope we've answered some important questions that people have about how to choose the right plan. Paul, I want to thank you for being with us today.

Paul Sharkey: Great. Thanks, Steve.

Steve Strauss: And Neal Marco of Strive Pest Control, thank you as well.

Neal Marco:Appreciate the opportunity.

Steve Strauss: From all of us here at the Health Plan Edge, thank you for listening. And thank you to UnitedHealthcare for making this recording possible. If [00:11:30] you enjoyed today's show, or if you have any questions about health insurance in your business, head over to UHC.com/employer to check out their free resources for small businesses, to listen to another episode, or to continue the conversation. We look forward to hearing from you.