Group Health Insurance – Tiered Plans
Facts of Being a Group Health Insurance Broker:
- All clients want the best provider, plan, benefits & modern key features
- Most cannot afford ^^^^
- It’s very hard to insure all levels of your employees with the same provider AND stay within budget
In most cases, when companies receive a group quote, the initial quote is for all employees on the same tier: all employees get the same plan selection, benefits, coverage area, deductible, etc.
What happens when it’s too expensive?
Options:
- Sacrifice provider quality- drop down to a lower tier provider
- Decrease your plan limits – many providers have multiple plans, with reduced benefits equating to lower premium
- Lower your coverage area – reduce your coverage area & save, for example SE Asia vs. Worldwide excl. USA
- Add in cost-cutting measures like co-pay or deductible
- Remove dependents – don’t offer insurance benefits to your employee’s family
- Remove benefits – have some extra benefits like dental, maternity, look at removing them and focusing on the most important benefits only: inpatient & outpatient
But….there’s another option Tiered Group Health Insurance
By structuring your group into pre-defined tiers, you can get the best of both worlds. Optimize your annual premium while structuring benefits suited to each tier.
Example Tiers:
- Owners, Partner, Directors & Other Senior Business Leaders
- Management Level & Key Employees
- Regular Staff
- Employee that have been at the company for X years
For example:
A company with 17 employees, including 2 key staff, may split a plan as follows:
Takeaways:
- By splitting the group into tiers, they’ve immediately saved quite a lot, just the difference between Worldwide excl USA > SE Asia excl. Singapore is usually a 25-30% cost savings.
- Further price reduction by not having dental & reduced limits for inpatient & outpatient
- By limiting dependents to just C-Levels, they’ve reduced the overall headcount and saved premium
- They could add a 3rd tier, a middle ground between the two, which would be for Key Staff or Management
Overall, they’ve saved a lot on their premiums, stuck with a quality provider and satisfied the needs of each tier to something that works.
While many companies may want to provide equal benefits to all staff, do you provide equal pay? Of course not. By structuring your benefits into tiers, you optimize your premium while meeting the needs of each tier.
Open to receive quotes for you & your company? Reach out to start a transparent conversation and get professional advice to help you attract, engage & retain your employees.
