By Esmeralda Mercado
The company I work for offers health benefits with Kaiser Permanente. Recently, we learned that California businesses which are currently insured by Kaiser for group health insurance may be able to switch plans effective January 2012, if they qualify. This is a big deal for people who want to lower their premiums and those who want to synchronize their benefits with the deductible reset in January. To switch plans during the limited Special Open Enrollment period, two of the main qualifiers are that the plan switch has to be to a downgraded plan and the paperwork needs to be turned in by the December 15, 2011 deadline.
Making Changes to Your Business Health Insurance
Ordinarily, groups that are existing Kaiser members can change their plans at their regular open enrollment period, which is the month of their annual policy anniversary. During this time, they can make a variety of changes to their contract. Some of those changes are:
• Employers can add eligible employees who previously opted out.
• They can change the probation period that a qualified new hire has to wait before being eligible for health benefits.
• The Group can switch plans, be it to an upgraded or a downgraded option. Click Kaiser Permanente Group Health Insurance Plans for more information.
During the Special Open Enrollment, the Group may downgrade plans only; no other contract changes are allowed.
How the Deductible Reset Works
If you are currently covered on a small business health insurance policy that carries a deductible, it means that you will pay out-of-pocket for certain medical services. In the course of the calendar year, January through December, your out-of-pocket expenses will be added up. Once they reach the amount of your deductible, your coverage will kick in and your out of pocket costs will either be discounted or no charge. Every January, the cumulative total of what you have spent towards your deductible is reset to zero. So for example, if you had surgery in September and you reached your deductible then, you can enjoy discounted benefits until the end of December only. In January, your deductible will reset to zero and you start over again.
Who can most benefit from downgrading business health plans?
If you are in relatively good health and you can afford to absorb a higher deductible, then downgrading plans during the Kaiser Special Open Enrollment may work well for your group. First evaluate your health history to make sure that your total out-of-pocket for services that you tend to go in for don’t end up costing you more than the premium savings.
If you have expensive or frequent ongoing treatments and your current health plan works for you, then it may not be essential to switch plans in January. However, if you are planning to have surgery or receive any other costly medical service and you are covered under a deductible plan, you might consider scheduling the surgery/service for early 2012 instead of 2011. This way, any money you spend towards the deductible will be applied towards year 2012. If you end up reaching the deductible amount, then, your out-of-pocket cost for future covered expenses will be discounted for the remainder of the year. Important note: Be sure to consult with your physician before postponing any medical service.
Who can be disadvantaged by switching to a cheaper group health insurance plan?
As eluded to above, this may not work for someone who has costly or ongoing treatments or someone who is anticipating hospitalization. Since the Special Open Enrollment involves a plan downgrade, you would have to switch to a plan with a higher deductible. That means your share of the cost for medical services would be more. So even though you would save premium dollars by switching to a higher deductible plan, you would end up paying more in the long run, due to the higher deductible for medical services.