5 mistakes to avoid when purchasing group health insurance
Offering a strong benefits package to employees can be one of the best ways to attract and retain top quality talent. While benefits packages will be different for each and every business there are a number of essential elements that the most successful packages all offer including group health insurance. The problem here is that simply offering health insurance will not guarantee a successful benefits program. Here, we take a look at the top five mistakes managers make when implementing group health insurance and how you can avoid them.
1. Not selecting the right type of coverage
Generally speaking, companies will secure one of two types of plans: local or international plans. Local plans are designed to provide coverage in one country or city. In Hong Kong’s case, local plans will provide coverage of medical bills within Hong Kong.
International plans, on the other hand, are, as the name suggests, international. They provide coverage of medical bills in pretty much every country on earth (many plans will actually exclude the US due to the incredibly high cost of care in the country).
The mistake many group health insurance managers have made in the past is securing an inadequate level of coverage for employees. This is especially true for businesses with multiple offices in different countries and employees who travel between them. If you secure a local, Hong Kong only plan and an employee gets sick while visiting outside of Hong Kong, their medical bills will not be covered.
As a general rule of thumb, if you are going to move employees overseas, or to other countries, for postings it would be advisable to consider securing them an international health insurance plan. This is especially important if they will be traveling or relocating to an area with sub-par health care and will not be eligible to receive care from local facilities.
2. Believing pre-existing conditions are automatically covered
Historically, group health insurance plans have included what insurers refer to as a Medical History Disregarded (MHD). This means that the medical history of those covered by the plan is not taken into account when these people join the plan. In other words, their pre-existing conditions are covered.
While it is still common to find group health insurance plans with a MHD, there is an increasing number of group plans where pre-existing conditions are not covered unless you negotiate an MHD when you secure the plan. If this is the case, there will usually be a higher premium for the plan. Due to this, it is crucial that you review any potential plan you are considering thoroughly to ensure whether pre-existing conditions are covered, or whether MHD is available.
3. Not fully understanding the regional coverage or eligibility requirements
This is a two-fold mistake some plan managers can make. First off, it is important to know the regional requirements around health insurance. What we mean by this is that some countries in the region have implemented health insurance requirements that must be met by any person living in that country.
For example, if you plan to open an office in Dubai and send staff from Hong Kong to the new office it is now mandatory for all residents to secure company sponsored health insurance that meets strict requirements before a visa will be issued.
Beyond that, some insurers will have a compulsory membership clause attached to their group health insurance plans. This is a contractual clause that states that all staff members of a certain level that you have selected to cover with the plan must be covered.
For example, if you choose to secure an international health insurance plan for your senior managers in Hong Kong, all senior managers will be required to be covered by the plan. If a new manager joins, they will be required to be added to the plan.
To be clear here, this is not the case with all group plans but it is something to look out for, especially if you have a growing business.
4. Leaving employees out of the selection process
It is not uncommon for an HR team or managers to come up with what on paper looks like a great group health insurance scheme only to find out that staff aren’t using it. If this is the case, the investment made will not usually see a positive return and could end up costing the company a fair amount of money.
The most successful group insurance plans offer coverage that the employees find to be valuable and usable. The best way to ensure this is to involve your staff during the group insurance selection process. Take the time to ask them what types of coverage they value and believe they would benefit from.
This can help ensure that your staff know what is covered and how to use the plan which in turn reduces the amount of time needed to manage the plan. Beyond that, staff who are invested will usually be more pleased with their benefits which could help increase retention rates.
5. Going with the cheapest plan
As with many things in business and indeed life, the cheapest solution might not be the best solution. This is true for group health insurance plans, where simply going with the cheapest solution is not always the best idea.
Cheaper plans will tend to have a number of drawbacks that may not be apparent at first. For example, they might offer lower levels of coverage or might not cover specific conditions or treatments. This will have an impact on not only how employees use the plan but also the overall return on investment.
Beyond that, cheaper plans might not offer additional benefits such as wellness that allow companies to build a solid benefit platform on. By including these additional benefits, companies have been able to not only realize an increased return on investment, but employees are often more productive and healthy.
How to avoid these mistakes
So, how can you ensure that you are selecting the best plan for both your business and your employees? One of the best ways is to work with an employee benefits expert like Pacific Prime. We have a dedicated team who works with group clients to help them secure the right benefits plan for your employees. Click here to learn more about how we can help with group health insurance.