GROUP HEALTH INSURANCE

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The biggest controllable fixed cost for any small business!
Pennsylvania now has more choices than ever before!

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In Pennsylvania, for years Blue Cross Blue Shield charged the same rates for a 20 year old as a 60 year old and still offered the most competitive products. More importantly, the health benefits offered were much broader than with other companies. Times have changed! Welcome Pennsylvania to a new age of competition in the area of group health insurance. Here at S K Associates we offer the products of virtually every group healthcare provider in Pennsylvania.

Unlike individual health or car insurance where claims or health history can lock you out, group health insurance in Pennsylvania does not shut the door on unhealthy groups. Yes there is some medical underwriting for smaller groups, but there is always a reasonable provider of last resort, if overall group health drastically deteriorates. This means that you may shop from renewal to renewal without fear of being locked out. That said, there is still a fine line; there is no question that increased utilization or loss experience can affect rates adversely. Click here for free quote.

Pennsylvania law precludes HMO's from being rated up more than 15% above base rates for health issues. Some companies circumvent this by offering the public rates below their base rates to begin with. Therefore less desirable groups can be rated 15% above base rates which is actually 30 - 45% above the rates offered to the general public. Most managed care companies actually offer lower rates for their more comprehensive Point of Service (POS) to discourage HMO enrollment.

Some companies are definitely more competitively priced for unhealthy groups! In Pennsylvania, Blue Cross Blue Shield companies while traditionally offering great networks, are almost always more expensive for healthy groups. This is because they are providers of last resort. For smaller groups (under 100 participants) they cannot rate up for health reasons.

Aetna, essentially a managed care company (HMO's & POS's), will not rate up PA small groups (2-19 participating employees) more than 15% for health; there is no rate up for groups of 20 - 50. Therefore when Aetna is available, with a viable network of providers, they should have the most competitive rates for groups with any appreciable health issues. Geisinger is another company that has no individual underwriting for groups of 15 or more, however; they do ask if there are any ongoing health conditions. Preferred Provider (PPO) companies like Principal Financial and Fortis are quite price competitive for extremely healthy groups of all sizes, however; one seriously sick individual can adversely skew the rates up for small groups under 100 employees. Both of these companies utilize national networks, so they are available in more PA counties than most other insurance companies.

Health America is actually available in 64 of PA's 67 counties, however; they do have network issues in certain regions. Their medical underwriting is probably somewhere in the middle of the two extremes previously alluded to. In summary, all carriers are regionalized, usually being only competitive in specific counties.

A list of our Pennsylvania group health providers include Aetna, AMS, Capital Blue Cross, Cigna, Fortis, Geisinger, Health America, Highmark Blue Shield, Independence Blue Cross, Intercounty, Keystone, Oxford, Principal Financial, Teacher's Protective Mutual, United Healthcare and UPMC. All of these carriers are regional within the state. None of these companies alone has the best network throughout the entire state. As a group they offer a full complement. Bigger networks attract more healthcare professionals and better discounting. This means better pricing for you the business owner.

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Health Plan Types:
Fee for Service / indemnity

Managed Care Plans

• HMO
• POS
• PPO

Fee for Service
These more traditional type plans are much less prevalent in today's world of managed care. Yes these plans allow for more freedom of choice of healthcare professionals as well as facilities. The main caveat is cost! As a small business owner under the cloud of out of control medical costs, one should not have to hard sell employees on managed care. Especially when they see all around them how others have already been forced into sharing the cost burden.

That said there is still a market for the traditional type of plans. Here we will only distinguish the high costs of virtual total freedom of choice versus the shared savings of managed care. Fee for service plans also do not reimburse the insured individuals for preventative medicine. As business owners we will assume that you have already weighed the pros and cons.

Managed Care Plans
Managed care plans are certainly more restrictive than fee for service plans. Managed care does mandate that one utilize the healthcare professionals and facilities within the network. Some managed care plans will allow one to go out of network, but only at an additional cost in the way of a co pay usually measured as a percentage of the cost or as a flat deductible. One glaring positive is the inclusion of preventative medicine as a covered benefit in managed care plans.

Health insurance companies contract with individuals as well as groups and institutions. These healthcare providers offer the insurance carriers discounts in order to be part of the network. Generally the strength and size of the network determines the size of these discounts. Therefore these factors should facilitate more competitive rates, all else being equal. Of course medical underwriting, desired profit margins and overall management of the insurance company must also come into play in determining how much you pay as a consumer.

HMO- Health Maintenance Organization
HMO's come in many different forms. HMO's require that you choose a primary care physician. The traditional plans mandate that one needs a referral to a specialist within the network. Most times this referral is easily facilitated without any banter or hassle. Some products charge a slight premium for a no-referral option.

Traditional HMO's only charge co-pays for various medical services rendered. Generally speaking HMO's free the individual from cumbersome paper work and claims forms, ever present in the indemnity type fee for service plans.

Other hybrid type products allow the consumer to cut costs even more through additional cost sharing measures such as deductibles and hospital co-pays. Remember the less the insurance company has to pay is directly correlated with the premiums the business owner / employee has to pay.(more and more employers are being forced to making employees share in the cost) All the more reason for managed care.

POS - Point of Service
The point of service offers a less restrictive version of managed care than the HMO. One must still choose a primary care physician, however referrals may be directed outside of the network. There are generally deductibles or percentage co-pays for going out of the network. In addition paper work is necessary in such instances. Generally speaking the cost differential is not great between the POS and HMO. The main reason is that most individuals find a way to stay in the network and save themselves the expenses. This is the backbone ideal of managed care; share the expenses and they will be lowered. Therefore everybody saves in the long run.

PPO - Preferred Provider Organization
The PPO combines the lower costs of the HMO with the freedom of choice of the traditional indemnity or fee for service plan. Managed care is implemented with another twist. There is no requirement of a primary care physician; therefore the need for referrals is eliminated. The restriction of staying in network is also avoided, however going out of network will cost more as a co-insurance or a co pay is levied for using a provider outside of the network. Staying with the main theme of managed care, the insurance company saves money if you stay in the network. If you stay in the network, you save money by avoiding a co-insurance penalty. Again, going out of network will mandate additional paper work.

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