I do call-in radio shows every once in a while just to hear what people want to chew the fat about.  I did one about a month ago and got asked by three different people on three different calls why Harvard Pilgrim didn’t offer a certain kind of plan.  One called about a “two person plan” instead of a family plan for herself and her son.  Another person called about chiro coverage as a part of the plan design.  And a third caller asked me why we didn’t offer high deductible plans attached to a Health Reimbursement Account.  I found this all kind of interesting, because we sell all three of these plan designs - in both the individual and group markets - and as the calls went on, I realized the callers just assumed that Harvard Pilgrim had chosen the plan design being offered by their employer.  They didn’t know, or didn’t seem to know, that their employer chose what plans would be offered to these individuals and their families.

There are a lot of misunderstandings in health care generally and health insurance in particular, and this is another one.  Most of the time, health plans offer a wide range of plan designs to the employer community, and they choose the one - or the combination of offerings - that they believe will make the most sense for their workforce.  Some will offer fully insured plans - where the health insurance carrier is on the hook for the the medical expenses incurred by the employer’s employees and their families - while other plans are self-insured, meaning that the employer is on the hook for paying for the next year’s medical expenses.  Fully insured plans are regulated at the state level - welcome to the ongoing debate about state-mandated benefits - while self-insured plans are regulated at the federal level, and have far more flexibility about plan design, covered benefits and the like.  Small businesses generally buy fully insured plans, while large businesses are usually self-insured.

But even now, after sixty some years of group/employer-sponsored coverage, there is still some confusion about who’s doing what to whom (word choice is intentional, and kind of a joke) when it comes to plan design.  Perhaps we need to treat the open enrollment process as a pro-active, engaging event, so that people know what they’re getting and why from their employer.  That way, people would understand why some plan designs made the cut, and others didn’t - and if they wished to raise issues about offerings the following year, they could.

This would clearly create more work for the employer in the short run, but over time, I think employers are much better off if their employees understand why certain decisions get made, and what the process was that got them there.  This could be one of those times.  And frankly, sometimes it can save money, too.  Check out my post about Harvard Pilgrim’s experience as an employer.

Posted by: Charlie Baker in Background, Employer