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Health Plan For You


Tuesday, October 10, 2006

How to Start a Successful Consumer Driven Health Plan

Successful Consumer Driven Health PlanAny small business with more than one employee will benefit from converting a traditional health plan to a consumer-driven design. These instructions assume that your business already has a traditional group health plan in operation. Once you have decided to get help from Freedom Benefits Association for the investigation, planning and set-up of a CDHP (Consumer Driven Health Plans), follow these step-by-step instructions to ensure success of the new health plan.

Step 1 : Determine Specific ObjectivesThe primary objectives of a consumer driven health plan are to improve the quality of health care received and to lower overall health care costs. If you and your employees are completely satisfied with your current health plan, then it makes no sense to make changes. Typically the price increases are greater than the employer can bear and one or more employees has had bad experience with the chosen health plan and wants changes. Attainment of one or both of these goals should be clearly viewed by the change to a consumer-driven health plan as likely results before any change to the current health plan is attempted. Due to the inefficiencies of most small business health plans, it is usually easy to attain measurable success in each of these. Generally, little effort is required to attain these goal, they are simply the probably result of this type of health plan change. While of course these cannot be guaranteed, OnlineAdviser network is not aware of any businesses, large or small, that have not reported overall favorable results as a result of converting a traditional health plan to a CDHP.

Step 2 : Complete a "Benefits Worksheet"A worksheet helps to gather the required information in advance and helps the employer better understand some of the options available. Completing the worksheet also helps the employer formulate questions in anticipation of a planning session with the plan adviser. A worksheet is available online at FreedomBenefits.org or can be obtained from the plan adviser.

Step 3 : Schedule a Telephone Call With the Plan AdviserThe plan adviser will personally collect the information necessary to start your new health plan. Since consumer-driven health plans offer a wide range of flexibility in design, the adviser will walk through the options. It helps if the adviser has received a copy of your completed Worksheet prior to the call.

Step 4 : Review the Plan DocumentsMake sure that the plan documents reflect the specific benefits you wish to provide. While amendments can always be made later, it makes sense to get it right the first time. Some employers may wish to have their attorney review or prepare the document. Most firms elect to use the prototype document without modification. The plan documents are written in "plain English" and intended to be easy to read. If any changes are needed, tell the plan adviser.

Step 5 : Communicate Benefits to EmployeesGive each eligible employee a copy of the Summary Plan Description along with an introductory note. This can be delivered by paper or e-mail. This easy-to-read document helps to introduce the health plan changes in an employee meeting and be sure that employees have the telephone number of the plan adviser at home so that spouses can ask questions directly.

Step 6 : Get Out of the Way!Some employees may elect to keep their health benefits unchanged. Others will change insurance plans or substitute other benefits that makes more sense for their individual situation. When the benefit is elected, some of the employees will use the online claim submission service to request reimbursement for out-of-pocket health expenses or other health insurance costs. All of these discussions and changes take place between the plan adviser, the health plan representative and the individual employee, so the employer does not need to do anything. The health plans generally take care of all billing issues for insurance benefits. The plan adviser prepares claim verification reports for uninsured medical expense reimbursements on either a monthly, quarterly, semi-annual or annual basis.

Step 7 : Mid-year claims administrationIf the plan includes periodic cash reimbursement for uninsured expenses, it makes sense to remind employees to submit claims online on a timely basis. Under HIPAA law, the employer should not be involved in any way with the claims process. The plan adviser will compile an accounting report of verified claims that are eligible for reimbursement under the provisions of the new health plan.

Step 8 : Wrap-up at end of yearMost consumer driven health plans require a year-end accounting report and this usually coincides with the calendar year. This is usually combined with an independent claim verification report where appropriate. The plan adviser prepares this report and, if necessary, the "signature ready" tax return filing for the benefit plan.