During its quest for an affordable health insurance alternative, Ratner discovered limited-benefit health plans. The low-cost insurance products would bring financial respite for the company, but they were far from the ideal solution. Limited-benefit health programs typically cover only a narrow scope of medical services and no catastrophic events, like heart attack or cancer.
"We faced a quandary: Do we continue paying for a comprehensive plan that is inaccessible to most employees, or do we adopt a plan that is narrow and does not offer catastrophic coverage?" Mendenhall recalls.
Ratner’s situation is not at all uncommon. Double-digit increases in the cost of health insurance are forcing hundreds of companies to take a critical look at their benefit packages. After careful thought and consideration, Ratner opted to do away with its HMO in favor of a limited-benefit plan, Mendenhall says. She says this was the right decision because all of the company’s employees now receive some type of coverage.
The company is not saving any money, according to Mendenhall. Ratner picks up the tab for the annual premiums on its limited-benefit health program, she says.
"What we were able to do is provide medical care for our workers and gain some control over rising costs," she says.
Because limited-benefit programs offer a scant menu of medical services and a set amount of allowable expenses, Ratner is virtually immune to price fluctuations and high co-pays. Enrollees are covered for a finite number of services, however, so if they step out of these boundaries they pay the costs out of their own pocket.
This type of health benefit structure encourages employees to take a more active role in their health care needs, according to Mendenhall.
"We want to get them to be better consumers of health services," she says.
Ratner, however, does not expect its employees to change by themselves. The company provides educational material that explains how they can get the most out of their limited-benefit programs and has distributed directories of preferred health providers.
Ratner recognizes that going without catastrophic medical coverage is not the ideal situation for many workers, and has tweaked its benefit package in recent months. This year, Ratner gave employees access to buy broader programs that offer more complete insurance. However, if employees want coverage that goes beyond the standard limited-benefit program, they will have to pay for it themselves.