ThoraOlsen

Asafiscallysponsoredorganizationwithaparentnonprofit,providingquality,
affordablehealthcaretoyouremployeesisessentialforemployeeretention,butcanbe
incrediblycomplicatedgivenbudgetrestraints.
1. As I see it, you have three options: to go through the Affordable Care Act, and
thereby functioning through Covered California as your proxy, or going straight to
an insurance company for your desired coverage plan. Within the ACA, you have
to decide whether or not you want to allow employees to choose from a range of
options or choose a specific one. Your third option is to come up with a defined
contributionstrategypairedwithindividualhealthinsurance.
2. If you choose to dictate the plan within the ACA or by going directly to a
provider, you then need to choose the type of plan: HMO (low deductibles and
more affordable on all sides, but restricted coverage anything outside of the
network is not covered and has to be paid directly by employees), PPO (higher
deductibles and premiums, but allows for employees to go in or outside the
network with varying levels of copays, coinsurance, and out-of-pocket
maximums), HSA-eligible (essentially a PPO with high deductibles that puts
discretionary money into an HSA account for medical expenditures, but can cause
trouble for employees, particularly older employees, if they have a catastrophic
medical event and spend that HSA money), POS (allows employees to go to
almost any provider, but tends to have extremely high deductibles); the main
debate would be between HMO and PPO. Questions to consider are:
a. Do you want to be able to provide the best healthcare available, or merely
go for an economically savvy plan for your end?
b. Do you want to shift the majority of costs to the employees or be able to
provide that through the business?
c. Most companies go for high-deductible plans, especially when employees
tend to be on the younger side: getting sick less means the chances of
paying that deductible with any frequency is pretty low, meanwhile
premiums are on the lower side, bringing the average cost down for the
employees (cost-sharing is high, but ostensibly infrequent)
d. Allowing employees to choose, however, might account for a discrepancy
in the healthfulness of your employees and their specific, varying needs
e. Tax-credits. If you get one, how much that will offset the cost of whatever
you provide?


Option1:CoveredCaliforniaforSmallBusinessisanewapproachtoofferinghealth
coverage,throughtheAffordableCareAct,thatputsyouincontrolofyourhealth
insurancebudgetwhileallowingyouremployeestochoosefromaffordable,quality
healthplansfromprivateinsurancecompanies,suchasBlueShieldofCalifornia,
ChineseCommunityHealthPlan,HealthNet,KaiserPermanente,andWesternHealth
Advantage.
Wedoknowthemaximumoutofpocketexpensesthatemployeeswouldhavetopay,but
Iamunabletoaccessaccuratequotesforyourpremiumswithinthistimeframe(they
typicallytakebetweenfivedaysandtwoweeks).Youwouldbeabletochoosefroma
varietyoflevelsofcoverage:Platinum,Gold,Silver,andBronze.WithPlatinum,you
wouldpay90%ofaverageannualcost,andemployeeswouldpay10%,andthisgoes
incrementallydowntoBronze,whereyouwouldpay60%ofaverageannualcosts,and
employeespay40%.BronzewouldbetheminimumamountDalaiLamaFellowswould
havetopay,butthiscouldbeleavingyouremployeeswithhigherdeductibles,especially
iftheyneedmedicalattentionoutofnetwork.Forinstance,ForHealthNet,BlueShield,
CCHP,Sharp,andWesternHealthAdvantage,themaximumdeductibleemployees
wouldhavetopayis$6,500.However,withBlueShieldorHealthNet(informationnot
providedforotherproviders)iftheywereoutofcoverage,theywouldberesponsiblefor
payingupto$13,000.Silverlevelratesarethesameforemployees.WithGoldlevel,the
maximumincoverage,outofpocket,deductiblesemployeeswouldbeexpectedtopayis
$6,200$6,250(HealthNetGold80EPOAlternativeis$4,500)andforoutofcoverage
expensestheycouldberesponsibleforupto$12,400.ForPlatinumlevel,employees
wouldbeexpectedtopayupto$4,000incoverage,and$8,000outofcoverage.
ThroughCoveredCaliforniaforSmallBusiness,youcouldalsobeeligibleforatax
credittooffsetthecostofprovidinghealthinsurancetoyouremployees.Thelowerthe
averagesalary,themoreyourtaxcredit.TheotherbenefitofCoveredCaliforniaisthat
employeeshavetheoptiontoselectanyplanwithinthosetwolevels.Forexample,you
cansetyourbudgetbasedontheSilverlevelbutallowemployeestomoveuptoGold.
Thisprovidesyouremployeeswithachoiceofmultiplehealthplanoptionsfromprivate
healthinsurancecompanies,allowingthemtofindonethatfitstheirneedsandbudget.
Thiswouldbeparticularlydesirableforoldermembersofthestaff,whomayneedmore
medicalattentionthanyoungeremployees.CoveredCaliforniaalsoprovidesacertain

levelofease.Yourproductivitywouldnotbehinderedasallhealthplanpremiumsare
billedinoneconsolidatedmonthlyinvoice.

Option2:Youcouldgodirectlytoanyofthepreviouslystatedproviders,andskirt
CoveredCalifornia.Thereshouldnotbemuchofapricedifferenceineitherofthese
options.However,ifyouwentthroughCoveredCalifornia,youwouldbeassuredthat
youwerecomplyingwiththelaw,regardingemployeebenefits,althoughyouarenot
legallyrequiredtoofferhealthinsurance.
Option3:Thealternativetotraditionalhealthinsuranceplanswouldbetocomeupwith
adefinedcontributionstrategypairedwithindividualhealthinsurance,whichmaybe
morecosteffectiveforanorganizationofyoursize.Smallorganizationshavebeenhit
particularlyhardwithincreasedpremiumcostsanddecreasedcoverage.Withthis
method,youwouldallowemployeestofindtheirown,individualhealthinsurance,and
youwouldreimburseemployeespremiums,oraportionofpremiumsthroughadefined
contributionhealthplan.Thisgivesemployeesflexibilityandallowsyoutomakesure
costsarecontrolled.Withthismethodyouwouldcancelthegrouphealthinsuranceplan
oncetheyweregivenpropertimeandinformationonwhereandhowtoselecttheirown
healthinsurancepolicy,probablythroughtheHealthInsuranceMarketplace.Thereisa
certainlevelofpredictabilitywiththismethod,butalsoprobablymorefootworkforthe
employeethatisresponsiblefordealingwitheveryotheremployeeshealthinsurance
questions.Withthisoption,thesimplestwouldbe$10,000peremployee/year,ofcourse.
Butyoucouldalsoalterit,providingsenioremployeeswithabetterpackage,andlower
levelemployeeswithabitless.Thedownsideofthisoptionisthatemployeescouldfeel
neglectedanditcouldaffectretentionrate.
Otherconsiderations:Howmightyoudocumenttheprocessforinstitutionalmemory?
ThereshouldbeaspreadsheetlistingalltheinformationIcompiled,includingquotes
oncethoseareattained.
Whatcouldgowrong?Whatifyouchooseacheaperinsuranceandthensomeonefrom
yourofficehasahugemedicalissueinwhichhisorherdeductibleisveryhigh.Thegoal
shouldbetoensureagoodbalancebetweencostandprovidingahighqualityoflifefor
youremployees.Iamalsocuriousaboutwhetherspousesareentitledtobenefitsaswell,
orifsomeoneintheorganizationhasachild.
Mysuggestion:Youcandoalotwiththebudgetyouhave.Itsreallydifficulttomakea
suggestionwithouthavingthetimenecessarytoattainaccuratequotes,butIhavebeen
abletoestimatequotesusingEHealth.IsuggestyougothroughCoveredCalifornia
becauseitprovidesquality,affordablecare,andthenecessaryfoundationtomakethe

processasefficientaspossibleforyou.Youcould,forinstance,getKaisersPlatinum
HMOPlan,whichwouldcostyouroughly$4,032amonth,andyouremployeesonly
$448amonth.ThismeansDalaiLamaFellowswouldspend$48,384ayearonquality
healthinsuranceyouwouldbewellunderbudgetandknowyouremployeesweretaken
careof.Youcouldfeelethicallyalignedwithyourmission.YoucouldalsogowithBlue
ShieldsSilverPPOwhichwouldcostyouabout$4,105amonth,andyouremployees
$456amonth.Thisisabitmoreexpensiveforbothparties,butyoucansleepwell
knowingthatemployeeswillbecoveredoutofnetwork.