Comparing Cost Control Strategies

It is imperative that employers implement plans to help control the costs of health care. The employer-sponsored health plans are purchased by the employer to provide their employees with health care benefits. These plans are typically created by negotiating with insurance companies to help create a group health plan (GHP) to offer to employees. Once these plans are offered to employees they have the opportunity to purchase additional options to add to their basic plan such as dental or vision benefits. These options are known as riders. The open-enrollment period is offered annually, for new hires or on an as needed basis; this is when employees can make changes to their benefit options. During the open-enrollment period employees get to choose the options or benefits that best fit their needs or family’s needs for the upcoming benefit period. With open-enrollment there are different premiums and deductibles based on the benefits and options chosen by the employee. There are no third-party administrators (TPA) involved with these types of plans. The third-party administrator is known for processing insurance claims as well as maintaining certain aspects of employee benefit plans for a separate entity. Self-funded plans, which are also known as Administrative Services Only (ASO) is a self-insurance plan where an employer offers health benefits to employees with its own funds. There are plenty cost control strategies that can be put into place with self-funded plans, the biggest downfall is that the employee is unable to purchase riders. Self-funded plans typically use third-party administrators to take care of the tasks associated with the health plan, like paying claims and collecting premiums. Portability controls the cost of insurance for those who are altering or changing from an individual plan to a group plan, one group plan to another, or a group plan to an individual plan. Creditable coverage controls health care plan expenses by keeping new health plans...