Sleiman Karam

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In these challenging times employers tend to reduce their expenses to adapt to lower income and profits. One of the expenses often scrutinized is the Employee Group Insurance Plan. It is possible to make changes to the Plan without reducing the most important benefits that are of catastrophic nature.

There are many cost containment options available to reduce the costs of a benefit plan; some that have an immediate impact are;

PROFESSIONAL SERVICES:

In the last few years, claims for professional services have increased at a quick pace. Today, they represent an important portion of health claims. This has forced employers to consider a global combined maximum for all professional services instead of a maximum per service. Another method to lower the cost of benefits is to reduce the yearly maximum. Professional services represent approximately 15% of the total premium. These benefits may have an immediate impact on reducing costs of a health insurance premium.

DEDUCTIBLE:

The role of a deductible is to control the costs of a plan by eliminating small claims that should not be covered in a group plan. Insurance is a tool to protect against important and catastrophic risks. The deductible is a fair amount that would not affect the financial situation of an insured individual. A yearly deductible of 100$ is a minimum that should be used in insurance plans today.

Employers do not often adjust deductibles in order not to disappoint their employees. The present economic situation is a good time to optimise and update a group insurance plan.

DRUG CARD:

Insurers offer a discount when a deferred card is used instead of a direct card. This change reduces the health insurance cost by 5% to 9%.

With a deferred card, an insured individual will pay the full price of the claim and then be reimbursed a few days later. The pharmacist transmits the claim to the insurance company.

VISION CARE:

It is important to question the existence of vision care in a Group Insurance Plan.

When comparing the premium paid for the benefit versus the amount insured, for example, 200$ every 24 months, more employers are opting not to include vision insurance in their plan. Vision insurance can represent 10% of the health insurance premium

DENTAL CARE:

Dental care is an optional benefit in a Group Insurance Plan. To significantly reduce the cost of this benefit, one can decrease the amount reimbursed. For example, if we offer a reimbursement of 70% instead of 80%, the dental care premium will decrease by 15%. It is also very important to analyse and justify the deductibles and annual maximums in order to control the cost.

When modifying a Plan, it is very important not to relay the wrong message to employees; that is, to communicate the changes and maybe implicate them in the process. In these tough times employers need the full support of their employees.

Presented in this article are some of the cost efficient options available to any employer. There are many more available that may be recommended once an in depth analysis is made of your group insurance plan. If help is required, contact us. (Click here for the contact page)

Sleiman Karam, MBA GBA

Advisor in group insurance plans

Every year, the dentists’ associations in the country release their new fee guide for the year. In 2009, the Quebec fee guide introduces a 2,9% fee increase. This increase will affect the pricing of dental insurance plans.

It is important to note that insurance companies use a higher inflation rate when renewing group insurance contracts. They justify these inflation rates used (6% to 11%) by a combination of higher fees guide and an increase of the dental plans’ utilization (more claims).

These yearly increases in a difficult economic environment might encourage some employers to remove the dental plan or reduce the benefits. We work closely with our clients to help them contain the costs of this benefit and limit the increases by implementing a variety of measures. Some of the measures we can use are the increase of deductibles, change the frequency of the recall exam, lower the annual maximum.

For more information on the new fees increases in the provinces and territories please consult this document from Sunlife.

Sorry, this entry is only available in Français.

Sorry, this entry is only available in Français.

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