As the President of the Daedalus Group Limited and a Certified Employee Benefit Specialist of more than 30 years, Richard Dillabough has a unique perspective on what makes insurance programs good or bad and shares his insights in this blog.
Studies show that if people do not know how to differentiate one benefit plan from another, they often decide on price alone, which doesn’t always mean getting the best value for their dollar. Here are four areas to look at when evaluating benefit programs.
Price is directly related to how much coverage is provided. Other than amount of coverage being offered, there is not much variation between one insurance provider and the next. When you are looking at comparing programs, and you see a significant price difference, it is usually due to one program offering more coverage.
Programs may offer a reasonable price, but they want you to provide evidence of your good health before you can get the coverage. That is a significant cost determiner of a plan. If your health deteriorates over time and you want to switch programs, you may not qualify for the new plan. Once you are in a plan it is important to stay in it unless you are sure you can qualify for another one. This is why a plan that does not require medical questions is often worth your consideration.
Things to watch for when looking at plan design differences are annual maximums, deductibles, and coinsurance levels. A coinsurance level is the percentage of the medical cost that will be reimbursed by the program. For example, if the plan says 80% coinsurance, the plan will repay you up to 80% of the medical expense.
Other things to keep in mind are any pre-existing health condition limitations. The plan might be less expensive initially but won’t cover expenses that you are already incurring for an existing medical condition such as prescription drugs. Make sure you understand whether the plan has any limitations for pre-existing medical conditions before you join the program.
People often only think of their current insurance needs; however, insurance is about purchasing inexpensive protection against unforeseen circumstances like expensive drug bills or the expenses and loss of income that can be associated with an accidental death.. Getting an insurance plan that covers devastating healthcare needs will protect you from unforeseen financial losses. A few examples of catastrophic risk protection include life insurance, accidental death and dismemberment, ambulance services (including air), out of country medical coverage, home nursing care, and medical equipment (wheelchairs/braces/prosthetics).
Some plans include add-on services that can be valuable like an Employee or Personal Assistance Plan. These are programs that offer additional counselling services for emergency situations like finding elder care or daycare for children, financial planning, addiction support, weight loss advice, and career counselling.
People often forget to ask, “How do I use the program?” Some plans limit how you access the program, making them harder to use. Having a plan that allows you to interact easily with it and in multiple ways will increase its value to you. There should be a direct deposit option for reimbursement and more than one way to submit a claim. For example: point of service adjudication at the pharmacy, dentist, or paramedical services’ providers; a mobile phone app where you can submit your receipts by just snapping a picture of the receipt, and pressing “submit”; and online claims submission from the plan member’s site 24/7, 365 days a year.
If you need help better understanding your options, contact the benefits provider and ask questions. A good insurance plan comes with a toll-free help line and a plan member’s site that provides information describing the program in detail and your past claims history. This is particularly important when dealing with an annual or lifetime maximum contained with the plan contract. The plan should also protect your privacy and medical history. The more you know, the more value you will receive. The plan provider should offer a variety of ways to interact with the program. Remember that insurance is not about what you need today; it is about the services and coverages that you may need in the future.