Compare total cost, not premium.
The premium is only one part of what a plan costs an employee. The honest comparison adds the premium, the likely cost of care and the worst case.
Two plans, three kinds of year.
Illustrative figures only, to show the method. Real plans vary.
Plan A: higher premium, lower deductible
Employee premium of 2,600 dollars a year, a 500 dollar deductible and a 4,000 dollar out-of-pocket maximum. Healthy year: 2,600. Worst case: 6,600.
Plan B: lower premium, higher deductible
Employee premium of 1,300 dollars a year, a 3,000 dollar deductible and a 7,000 dollar out-of-pocket maximum. Healthy year: 1,300. Worst case: 8,300.
What the comparison shows
Plan B costs 1,300 dollars less in a healthy year and 1,700 dollars more in the worst year. Which is better depends on the employee, and the premium alone would not have said so.
What to ask before choosing
How often do I use care? Do I take a regular medication? Could I cover the out-of-pocket maximum if I had to? Is an HSA available with this plan?
Which plan is cheaper depends on the year.
Plan B is 1,300 dollars cheaper in a healthy year and 1,700 dollars more expensive in the worst year. Premium alone would not have shown that.
Illustrative figures: employee premium plus the most the employee could pay in the year.
We build the three-year comparison for your options.
We show premium, expected cost and worst case side by side for each option, so employees and HR see the same number for what a plan really costs.
Related pages.
Why do employees pick a plan that does not fit them?
Usually because the choice is made fast, from a table of numbers, with the premium doing most of the persuading.
The Out-of-Pocket Maximum, Explained in Plain Terms
The out-of-pocket maximum is the most an employee pays in a plan year for covered, in-network care.
Avoiding Group Health Insurance Plan Confusion
The full guide to helping employees understand their group health plan.
Questions that come up next.
Short answers to the questions employees ask after this one. Each links to its own page.
What is the difference between a deductible and an out-of-pocket maximum?
The deductible is what an employee pays for covered care before the plan starts sharing the cost. The out-of-pocket maximum is the most the employee pays in a year for covered in-network care. One is where sharing begins, the other is where it ends.
Do copays count toward the deductible?
It depends on the plan. On some plans copays count toward the deductible and on others they do not. Copays generally do count toward the out-of-pocket maximum for covered in-network care, but confirm in your plan documents.
Is coinsurance the same as a copay?
No. A copay is a fixed dollar amount for a specific service. Coinsurance is a percentage of the cost of a covered service that the employee pays after the deductible is met.
Ready? Send us your renewal, or talk it through with someone first. No cost, no obligation.
General information about group health plan terms, not legal or tax advice. Plan-specific questions belong with the plan documents and the carrier.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents, two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
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