For decades, employers have offered health care to their employees using a defined-benefits model, where the employer determines what health benefits are offered to all employees. But more recently, private health exchanges have emerged as a different model. This new option helps employers keep health care costs predictable and gives employees the power to choose their own health care plan. In 2011, Blue Cross Blue Shield of Michigan launched its first private exchange, GlidePath. This solution provides a way for businesses with more than 51 full-time employees to control the amount spent on health care, while providing employees with a choice in their plan. Seeing GlidePath’s success, Blue Cross decided to offer a similar option to companies with 50 or less full-time employees. That’s how Coverage for Companies came to be. Coverage for Companies is Blue Cross’s private exchange designed specifically for small businesses. It gives employees the freedom to shop for plans that best fit their individual needs, while allowing business owners to determine exactly how much they can put towards health care every year. Interested in how Coverage for Companies works? Here are the four basic steps:
- Determine a budget: As a business owner, you’ll determine how much to spend on annual health care for employees. Once a budget has been established, you will decide how much you are going to allocate toward each of your employees’ health care costs.
- Decide which plans to offer: With a variety of prepackaged plans that include medical, dental and vision coverage, you can pick which options will work best for your employees. You can choose between HMO, PPO and consumer-directed health care options.
- Allocate funds: Business owners allocate the determined amount of pretax dollars into an account. Employees will be able to access those funds when shopping for their health care plan.
- Have employees shop for their benefits: Through the Coverage for Companies online marketplace, employees can begin their shopping experience. Each can select the plan that will best fit their unique needs. It’s like an online benefits store with multiple plans to choose from, ranging in fees and services.
Transitioning to a new health care plan can be hard on employees, employers, office managers and human resources personnel, which is why Coverage for Companies agents are there every step of the way. These agents will ensure employees and employers have a smooth transition without putting extra stress on the HR department. If employees need of assistance, Coverage for Companies has online tools that can help them with the selection process. In addition, agents are available to help address any questions or concerns. Coverage for Companies is a way for both employers and employees to feel better about health care benefits. Small business owners will appreciate being able to set a specific amount of company funds to contribute toward each employee’s health benefit package. In turn, their employees can choose what level of coverage and type of plan is right for them. Click here to learn more about Coverage for Companies and how it can help improve your small businesses’ employee health care offerings. The following slideshow can also help: For more information on how private exchanges are changing the way businesses offer health care to employees, read these other blogs:
- The Small Business Owner’s Guide to Private Exchanges
- Private Exchanges Let Employees Decide What’s Affordable
- Private Exchanges for Health Benefits: A Popular Choice for Employers and Employees Alike
Photo credit: Internet Association About the Author
Jason Hover is vice president of Private Exchange for Blue Cross Blue Shield of Michigan. He’s responsible for driving the company’s strategy and solutions in the private exchange market, which includes developing the company’s proprietary GlidePath℠ private health insurance exchanges. Hover also leads strategy development for the Blue Cross Commercial Business division. Hover joined Blue Cross in 2009 and previously served as director of Commercial Business Strategy and director of Strategy and Planning.