Skilled workers are a manufacturing company’s greatest asset. Group health insurance can help manufacturers retain an adequate workforce and minimize turnover and lost work due to preventable injuries and illnesses. Businesses with one or more employees are eligible to purchase group health insurance. The cost of the plan is usually spread amongst a group of members or employees, resulting in more affordable health coverage. However, there are many variables when it comes to group health insurance. Here is a closer look at group health insurance options for the manufacturing industry.
Group Health Insurance Coverage
Health insurance helps businesses pay for healthcare expenses for their workforce. In exchange for a premium, the insurance company pays a portion of employee medical costs, including routine checkups, and treatment for injuries and illnesses. How much a plan pays per service depends on the specific insurance plan. Employers in the manufacturing industry can choose the coverage they want, such as the following:
Dental Insurance
When considering including dental insurance coverage within a group health insurance plan, there are a variety of options to consider which provide employers flexibility. These dental insurance plans can be customized around a business’ size and needs, including the ability to increase or decrease the network of dental providers, total deductible, coverage for preventative care or copay amounts.
Dental Preferred Provider Organization (DPPO)
Dental Preferred Provider Organizations or DPPOs are types of group dental insurance plans which appoint a designated provider network, but allow employees to visit dentists outside of the network. In most cases, employees which stay in-network are entitled to plan benefits such as free cleanings and reduced costs for fillings and root canals. Although DPPOs provide added flexibility, premiums for these plans may be higher.
Dental Health Maintenance Organization (DHMO)
With Dental Health Maintenance Organizations or DHMOs, employees are required to select a dentist as their PCP during the enrollment period. These types of dental plans are less flexible than DPPOs, but are often the more affordable option as these plans do not have deductibles. Providers of DHMOs receive a monthly rate and then provide employee plan members with services at a lower cost. Premiums for DHMOs are lower than DPPOs, but do not cover procedures that are out-of-network.
Life Insurance
Employers which offer life insurance policies within their group health insurance options often find their company’s recruiting efforts and employee retention improve. This is especially so for employers in industries that are considered above-average in terms of risks and liabilities, like the manufacturing industry. There are a few types of life insurance policies employers can offer, and each type should be considered carefully.
Whole Life Insurance
Among the different types of life insurance policies, whole life insurance policies are among the most common. Adding a whole life insurance policy option can be ideal for employers who wish to offer their employees a fixed premium over time.
As long as premium payments are made, plan holders can plan for their family’s future after their passing, as this policy allows them to keep track of their total payout.
Term Life Insurance
Term life insurance policies provide protection at a fixed price for a predetermined amount of time, chosen by the plan holder themselves. Employees who have children may want to consider adding this policy to their plan, as term life insurance allows beneficiaries the ability to use the payout for any financial obligation.
Universal Life Insurance
For those who wish to offer their employees a more “permanent” life insurance policy should consider offering universal life insurance. These policies cover the policyholder for the duration of their lifetime, providing their beneficiaries death benefits and the “cash value” of the deceased’s policy.
Variable Life Insurance
Variable life insurance policies are the most “flexible” of all types of life insurance policies. These policies offer flexible premiums, flexible death benefits, a variety of investment options and cash value.
Employers may want to consider offering this form of life insurance to employees who do not mind the added investment risk involved and want the ability to use the cash value of their policy to cover financial emergencies.
Vision Insurance
Working in the manufacturing industry means that employers should place a heavy emphasis on their employee’s vision wellness, in order to mitigate the risks and liabilities that stem from their work’s environment. By including vision insurance in a group health insurance plan, plan members may have their eye exams, contacts and glasses covered. Some vision insurance coverage options offer members cost savings with certain eye surgeries and treatments of particular eye diseases.
Higher Premium Plans Vs. Lower Premium Plans
When shopping for group health insurance, manufacturers will likely come across both higher premium plans and lower premium plans. A group health plan with a higher monthly premium requires members to pay a lower amount for their deductible when they receive care.
Group health plans with a lower monthly premium require members to pay a higher amount for their deductible when they receive care. Although one option is not better than the other, it is important to consider which option is more preferable — paying more upfront when care is needed or saving on premiums each month.
Types of Group Health Insurance Plans
Health insurance networks are generally made up of hospitals, doctors, and various other providers that agree to provide negotiated rates to members of certain health insurance plans. There are several types of networks that a manufacturer may consider when looking at group health insurance. The most common include:
HMO
A Health Maintenance Organization (HMO) typically requires members to see a primary care physician (PCP) within the plan’s network. Employees will need to see their PCP to receive referrals to other providers in their network. HMOs can help control costs as it is a defined network, leading to lower premiums. An HMO may also be paired with a low or no deductible plan.
Under an HMO, members are generally required to stay in-network with the exception of emergency services. Members may require preapprovals for certain medical services, which are generally handled through the person’s PCP. In HMOs, providers enter a contract for set rates instead of being paid per service performed.
PPO
A Preferred Provider Organization (PPO) allows members to see healthcare providers both in- and out-of-network. PPOs provide employees with greater flexibility to see the doctors that work best for them. However, the cost of seeing an out-of-network provider is higher than seeing an in-network provider.
Premiums tend to be higher with PPOs and there is usually a deductible. Under a PPO, the provider and facilities have negotiated lower rates for the services they perform. Members who remain in-network have access to these negotiated rates, resulting in lower out-of-pocket costs. Out-of-network services are available at a reduced level of benefits and coverage.
EPO
An Exclusive Provider Organization (EPO) does not require members to have a PCP or to get a referral to see a specialist. Employees can see any provider they wish in-network; however, there are no out-of-network benefits. Facilities and healthcare providers that participate in EPOs are paid per service.
Similar to HMOs, EPOs restrict members’ ability to see out-of-network providers with the exception of emergencies. Services are performed under negotiated rates for more affordable health coverage.
Request A Consultation With New City Insurance
The average manufacturing company has seen an employee absenteeism and turnover rate of 37 percent, according to the Association for Manufacturing Excellence. While there are many ways to reduce turnover and minimize absenteeism, offering a comprehensive employee benefits package that contains group health insurance is one of the most effective.
For more information about group health insurance options for the manufacturing industry or to schedule a consultation with an employee benefits consulting firm, contact New City Insurance.