Investigating medical cost sharing as a health insurance alternative for your employees medical needs
Employers have a responsibility to both their employees and their business. The greatest asset of any business is its people. All the technology in the world cannot replace the human element in a successful business. In a world where health care costs continue to rise, providing your employees with reliable, effective, and affordable health benefits is the most important way you can take care of them, which reflects on your bottom line. Traditional medical insurance can be extremely expensive to your business, but with coverage limits and high deductibles still leaving sick employees in crippling debt.
There are not many health insurance alternatives that businesses can use to meet their employees’ needs in a more cost-effective manner. Medical cost sharing has been practiced by individuals and families in Christian communities for more than thirty years as an alternative to medical health insurance. It has been shown to provide better reliability than many traditional options. Members simply place their trust in a community instead of a for-profit business. Sedera has stepped in to offer community based medical cost sharing membership only with no faith requirements. Scoop Health, powered by Sedera, has been shown to save employees up to 60% on monthly member contributions as compared to traditional medical insurance premiums.
Why You Need to Provide Employees with a Health Care Contribution
1. It’s Important to show your employees that you care.
World-leading businessmen, Richard Branson sums it up perfectly: “Take care of your employees, and they’ll take care of your business. It’s as simple as that.” When you invest in your employees’ wellbeing, it’s an act of good faith. It demonstrates to your employees that you value them. The American Psychological Association conducted a recent survey and found that, when employees feel valued, they become more motivated and productive. Approximately two-thirds of workers who did not feel valued reported that this was due to a lack of non-monetary compensation. Furthermore, half of these undervalued employees said that they were actively looking for a new job. In other words, not ensuring an adequate employee contribution to health benefits results in higher employee turnover. The price of inflated employee turnover is extremely expensive and can cripple a small business. It results in more resources being used for employee recruitment, training, and decreased productivity when positions remain unfilled. Additionally, a recent Metlife study found that offering health contributions increases employee loyalty and commitment, corroborating these findings.
2. If you want the best, you have to make it worthwhile.
Glassdoor, an online recruitment agency, conducted a study as to what employer contributions drive employee satisfaction. An overwhelming majority said that employer health benefits and health care were the most important. This paints a very clear picture of what the average job hunter is looking for. The most highly skilled candidates are in very high demand. Thus, they can pick and choose which jobs and health benefits they want. Employee perks play a huge role in what makes a job attractive to a prospective employee. In fact, the 2016 Aflac Workforce Report showed that 60% of candidates would actually take a lower-paying salary if the perks were better. Quite plainly, if you want high caliber recruits you are going to need to provide a healthy health care contribution.
3. Healthy employees are more productive employees.
Absenteeism is extremely costly to any business. The research shows that the cost of absenteeism is 28% greater than the employee’s regular pay. While a study published by The University of Philadelphia showed that employers offering health care assistance had a direct correlation with decreased absenteeism. Moreover, there is evidence that offering health benefits to employees increases productivity on days worked. The take-home point here is that healthy employees are more present and productive.
What are Your Options?
Traditional Health Insurance
How much does traditional health insurance actually cost?
Health insurance costs more than you think it does. The employer is primarily concerned with the monthly premium, or portion thereof, for which the company is responsible. As we have discussed, however, the health and happiness of workers directly affects a company’s bottom line. Thus, it is worthwhile considering what additional costs your employees will encounter in the form of deductibles, co-pays and co-insurance. If these costs are too high, employees may not be able to access health care. They might not be able to afford health care even with the insurance.
- Most medical insurance plans have a deductible portion. This is an amount that the member has to pay for health care out of pocket before their insurance will cover any costs, even if those costs fall within the scope of the health insurance coverage. For example, if an insurance plan has a deductible portion of $5,000. This means that the employee with the health insurance would still have to pay the first $5,000 in medical bills before anything is covered under the insurance policy.
- There are additional fixed payments that insured patients have to make when accessing medical services. For example, if your employee was going to their primary health care provider (i.e. family doctor) they may have to pay a co-payment of $40-65. The co-insurance is often confused with the co-payment. These, however, are two separate costs. The co-insurance is the portion of medical expenses for which medical insurance will pay. This means that after the deductible is paid, if a plan has a 70/30 co-insurance rate, the member will still be liable for 30% of any medical bills.
- One must also consider the scope of the health policy in question. Medical insurance companies are very good at promoting what benefits they do offer. This can result in a biased perspective. It is important to understand what the plan does not offer. For example, if your employee requires an expensive new drug treatment that is not on the insurance company’s formulary (list of approved drugs), they can be stuck paying the full bill. Medical insurance plans are also tightly limited by requiring that insureds use network approved providers or pay a hefty out of network penalty. Again, your employees could end up with a huge medical bill if they stray from the medical insurance limits.
If your intent is to fulfill an ethical obligation to your staff by providing them with affordable health care, or to boost productivity, then medical insurance may not be the best option. There is still the potential that your employees will get mowed under by medical bills or be unable to afford the care they need. Even when companies claim to offer affordable health insurance, it may not be truly affordable.
Alternatives to Traditional Health Insurance
There are few alternatives to traditional health insurance, some of which may be incredibly effective, while others leave a lot to be desired. Investigating health insurance alternatives for new businesses may provide a novel perspective on employee health benefits.
Direct Primary Care: Membership Based Medicine
New Primary Care Memberships give members unlimited access to their physician via in-person office visit, phone or video chat for routine everyday care needs. There is only a monthly membership fee around $60-75 per month. There is no charge for the doctors time and help finding specialists and discounts on diagnostic procedures like x-ray, CT scan and MRI. They are very good and affordable for preventive care, chronic illness management and everyday routine care, however, they are not sufficient to meet all a person’s medical needs, especially since there is no emergency coverage. Sedera offers a nice discount to members who are enrolled with a direct primary care doctor, along with their medical cost sharing solution. This combination provides excellent all-round alternative solution to an employee’s medical needs from everyday care to even the worst medical disaster.
Defined Benefits and Defined contribution employer benefits plans
Defined benefits plans are insurance products that have a cap on the amount they pay out for a particular type of medical care. These plans have a payout similar to a Las Vegas slot machine but instead of fruits and bars, payouts are determined by hospital stays and surgical procedures. The insurance might pay $500 to $2,000 per day for hospital stays up to a maximum number of days. Likewise the plan might pay a certain defined benefit for a surgery or trip to the ER. After the payout the patient is on their own to sort out the bills and find out if there’s enough money to pay all the medical bills that follow.
Defined contribution is another way for an employer to help employees with their medical coverage needs. This is usually the last ditch attempt for an employer who can no longer afford the premium increases levied by health insurance. Instead of paying all or a portion of the premiums for an employer sponsored health plan, the employer simply offers employees a fixed amount to help subsidize the cost of them securing their own health insurance through an exchange or insurance agent. This gives the employee the flexibility to choose which type of medical coverage is best for their personal situation. Employees can decide to purchase health insurance or choose a medical cost sharing membership like the one offered by Scoop Health.
Medical Services and Drug Discount Cards
Medical discount cards offer members a reduced-fee for certain medical services or medications. Again, this is only a discount program and there is no protection in case of emergencies. These limited plans are restrictive in that the discount rates normally only apply when using in-network providers.
High Deductible Plans
These plans work in a similar fashion to traditional health insurance options and are not a great alternative for most employees. These plans have a higher deductible portion than traditional regular medical insurance. The result is that insured individuals pay a lower monthly premium but pay significantly more out of pocket towards large medical expenses. People sometimes combine these high deductible health plans with medical service or drug discount cards, however, this practice is counter-intuitive. By paying both the health insurance premium and the discount card fees, members can end up paying a larger amount than they would with normal insurance policies. It all depends on how sick they get and how much they need healthcare during the year.
Medical Cost Sharing
Medical cost sharing started out as a grassroots movement in the Christian community. It is a community-centered way of helping people to pay for the health care they need from a doctor of their own choosing. It was designed for the people, by the people. It is, therefore, simpler to navigate than most complex traditional health insurance offerings. There are no surprise expenses, complex formularies, or rigid networks. Medical cost sharing is community-driven, whereas medical insurance firms are profit-driven. Do you want your employees to be crippled with debt, or part of a like minded community that wants them to be healthy and thrive? This is real assistance instead of ‘proposed coverage’ and it’s actually a much more affordable option than traditional health insurance. For example, Sedera’s medical cost sharing model, members are saving as much as 50% on their monthly contributions as compared to their previous insurance premiums.
How does Scoop Health Work?
Scoop Health, powered by Sedera, offers medical cost sharing that gives members a wealth of support to help them to access the health care they need and deserve, and a way to pay when it becomes expensive. When a member encounters a medical problem, the entire episode of care is regarded as a ‘need’. For example, say you are in a sports related accident, then everything related to that sports accident is treated as a single health incident, or ‘need’. In this example, the need might include an ambulance ride, x-rays, doctor’s visits, a surgery, physical therapy, and even pain medications. Each need has an initial unshareable amount (IUA) that the member must pay. All costs from a single incident that exceed the member’s IUA are considered fully shareable with the Sedera community. In this way, medical cost sharing members are never wiped out by expensive, unexpected and unmanageable medical costs. Sedera members who enroll through Scoop Health have access to high-quality, affordable care as well as unlimited access to expert second opinions, 24-hour telemedicine services, and a personal member advisor.
No more network limitations and restrictions!
Members who enroll with Scoop Health identify as cash-paying patients, eliminating the tiresome ‘network’ restrictions that come with traditional health insurance. This is because virtually all medical practitioners offer a nice discount for cash or credit card. The member then just uploads the itemized medical bills to Sedera using a convenient phone app.
Is Scoop Health Right for your Business?
Scoop Health pricing has shown to be highly competitive, saving between 30-50% compared to health insurance premiums and the resulting medical expenses. Scoop Health offers an affordable alternative for individuals as well as both independent employers and franchisees. Employers are no longer limited to the choice between unaffordable health insurance premiums or offering nothing and hoping for the best. You can now afford to keep your employees and staff happy and healthy with the help of Scoop Health and medical cost sharing powered by Sedera.
A big part of the community-based medical cost sharing model is that members commit to living a healthy lifestyle. They are motivated and incentivized to help their members to live long and happy lives. As a business owner, you know the importance of keeping your employees happy and healthy. Medical cost sharing encourages employees to make healthy living a priority in the work environment. You can also encourage employee health by putting wellness rewards in place.
Wellness programs are becoming more and more popular with employers trying to hold down the cost of employment and health insurance by keeping employees healthy. They include simple changes in the work environment such as:
- Ensuring healthy lunches available in employee break areas
- Replacing junk food-filled vending machines with innovative vending machines filled with healthy alternatives
- Hold standing meetings. Research shows that people who spend all day sitting are 54% more likely to have a heart attack.
- Have outdoor team building activities such as a group walk or yoga classes
- Encourage employees to speak freely about anything that causes them emotional distress because mental health is just as important as physical health
- Providing employees with employer paid health benefits improves productivity, employee retention, and presenteeism.
- Health care perks are important and sought after by job-seekers and they attract the very best job candidates.
- Traditional employer-paid health insurance is no longer the only option for your business. There are innovative new health insurance alternatives currently on the market. These include medical cost sharing, direct primary care membership, medical service and drug discount cards, defined benefits and defined contribution plans and high deductible health insurance plans.
- Traditional health insurance can be very expensive due to high premiums, uncovered services and hidden costs. These include deductibles, co-payments, co-insurance, out of network penalties and uncovered treatments or medications.
- Medical cost sharing is a tried and tested method of providing access to high quality and affordable health care. It allows businesses to provide for their employees in a meaningful manner while still being affordable for both employer and employee.
- The big key to this community approach to medical care is each member committing to a healthy lifestyle. Employers can also employ wellness programs and incentives to try and help employees improve their health and productivity.
Scoop Health, powered by Sedera, offers an innovative and affordable community-based medical cost sharing model. Scoop Health goes above and beyond to help our members by ensuring they have access to 24-hour telemedicine services, expert second opinions, and a personal member advisor to help them negotiate large bills and find the care they need. Your employees deserve a community who cares about their health. You deserve the peace of mind of knowing that your staff is well cared for at an affordable price. If you are interested in a better way of keeping your business healthy, why not implement medical cost sharing today?