Group Medical and All the Choices

Published by tommurphy on

Did you know the State of New Jersey now offers 3 types of health plans? Read below to determine which one is best for your business.

Fully Funded is the most common path for a small business where you are buying a fully managed, premium driven health insurance service from a single carrier. These plans have higher administrative costs, typically higher deductibles and higher premiums. While they are easier for your business to manage, they cost substantially more because all the risk is pushed to the insurer. 

There are many benefits to having an ACA plan. Take for instance the guaranteed issue policy, which can extend to any eligible applicant regardless of health status. This means no matter what medical condition the patient might have, whether it is heart disease, cancer, diabetes or aids, they will still be able to receive coverage. Pre-existing conditions go hand-in-hand with the guaranteed issue. The ACA will cover you no matter what condition you might have as long as you have coverage under an ACA plan.

Level Funded programs seek to bring two services together. In Level Funding, you select a policy from a carrier and a third-party administrator manages the policy and claims on your behalf, often with significantly lower administrative costs. A Stop Loss policy is put in place to prevent financial loss from unexpected major health issues and then a premium is determined for the business.  If the premiums paid in the course of the term exceed the paid claims, then a refund is given to the company. Perfect for companies with 3 employees and up.

There are many benefits of level-funded plans, to both employees and employers, including:

Cost Savings: Fully insured health plans remove most of the risks from the employer, making the cost of the plan much higher for the employee. In contrast, a self-insured plan places most of the risk on the employer but has the greatest chance for producing savings in the form of claims being lower than premiums for the employee. Therefore, Level-funded health plans are the best of both worlds, making partial self-funding an easier and attainable option for a larger portion of employers, like small businesses. These plans save money for both the employee and the employer!

Plan Design: Level-funded health plans provide employers with far more flexibility in plan design and are exempt from some ACA regulations such as the 80/20 rule we talk more about below. Question-Where are you talking about this?

Regulation: Level-funded plans, even for small groups, do not have the same regulatory requirements as traditional, fully insured plans. This usually means that less administrative work is required.

Professional Employer Organization (PEO), is a type of full-service human resource outsourcing known as co-employment. In this arrangement, the PEO performs various employee administration tasks, such as payroll and benefits administration, on behalf of a business.  Some PEOs also have strategic services, but no two are exactly alike, so it’s important to research providers and compare their capabilities.

Call our office today to discuss which one is right for you.

DGS Benefits Inc. | 79 Chestnut Street, Ridgewood, NJ 07450 | 201-321-3031

Categories: Insurance