Excerpted from Nevada Employment Law Letter, written by attorneys at Lewis and Roca LLP
http://www.HRhero.com/nvemp.shtml?HLe
When you go out to dinner, do you like to order the all-inclusive meal in which the chef has already thought through your options and planned your dining experience for you? Or do you like lots of choices and being free to order three appetizers if that suits your mood or just a main course and dessert?
Employers - and their insurers - are taking a cue from the way people dine nowadays and adapting their health care plans to allow an individual option.
It's a Matter of Choice!
Think of prepackaged HMO and PPO plans as the prix fixe meal: one price and a set menu with limited and strictly defined selections. An increasing number of employers, though, are thinking of cafeterias as they create their health care plans. Not all employees have the same needs.
Lots of choices are the new trend.
At their most elaborate, some customized benefit plans can allow employees to choose from as many as five deductibles, five coinsurance levels, several prescription drug options, and doctor and hospital networks that are narrowly defined or offer broad choices.
Just like at the cafeteria, the selections the employee makes to suit her own tastes and needs will be felt in the pocketbook through monthly payroll deductions. As they say in France, "Chacun a son gout" - each to his own. That's satisfying a lot more employee needs.
But Why Offer More?
Doesn't it seem like offering a wider range of health care options would be a lot more expensive and cumbersome to administer? The reason for the new buffet of options may surprise you: As more companies seek to shift the increasing costs of health care to their employees,
they're empowering them to control their personal expenses and providing them with increased power to make their own decisions.
The budget-conscious employee, just like her Atkins-dieter counterpart, may opt for higher deductibles and co-payments to achieve a slimmer monthly premium. And the gourmand employee, who wants to take his chair right up to the cafeteria line and chow down, can expect to pay a heavier price for that privilege.
Is a la carte all it's cracked up to be?
Providing more choices isn't without its perils. Employees may be overwhelmed by their options. It can be like peering at one of those 12-page menus that offer every type of cuisine and dietary option around. They may become confused or regret the decisions they've made.
Being able to customize may encourage healthy employees to take more risks with their own well-being in exchange for the coveted lower premium, and that may escalate premium costs for employees who truly need lots of medical care. Having an easy-to-use online tool, one that provides approximations of the ultimate cost of their selections, can help your employees "calorie-count" their health insurance needs.
An after-dinner mint or a bitter surprise?
Offering your employees a smorgasbord of benefit selections may not be the right move for every employer. If your workforce is sufficiently diverse, then providing employees with a "one from column A and three from column B" menu will enhance their ability to make their own choices. Then you may find good tidings tucked in your next fortune cookie.
Additional Resources
HR Executive Special Report: Employer Checkup: How to Choose & Manage Employee Health
Benefits http://www.hrhero.com/special_reports/benefits.shtml?HLe
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Copyright 2005 M. Lee Smith Publishers LLC. This article is excerpted from *Nevada Employment Law Letter.* Read more about the print newsletter and the Nevada attorneys who
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