How important is the medical carrier when choosing a PEO?
Employee benefits and the topic of health insurance has been on everyone’s minds the last few years and for good reason. Increasing premiums, Obamacare, state and federal regulations - it’s become a circus. One question we get often is who is the best medical carrier while it sounds simple to answer, it isn’t.
Some people have personal preferences; others want the best, and some just want coverage. There isn’t one who is better than the other. However, there are better plans offered by each medical carrier, and the better levels of coverage are reflected in the premium.
In PEO unlike the open market, all of the plans are large group plans that are offered, meaning that the coverages are better than what’s available in the small group open market for small companies. For example, choices with Aetna in the small group market are limited, but in PEO Aetna offers some amazing plans that are only available in PEO or large group plans for large employers.
PEO accomplishes many things for the companies that use it. Medical insurance is a driving factor in choosing a PEO for the majority of companies. Most PEOs offer access to a national carrier such as Aetna, UHC, Blue Cross Blue Shield and so on. The plans offered range from HMOs, EPOs, PPOs, POSs and HDHPs, and you would pick the plans that you want to offer your employees.
A good rule of thumb is to offer three plans, a high, medium and low plan, setting a contribution rate and letting your employees pick the coverages they want. One important point to consider when joining a PEO is been you joining a PEO that offers the same medical carrier as you currently have - if so most likely your current doctors will be part of the network.
However, if you are changing medical carriers when joining a PEO, it’s important to ensure your doctor’s and your employee’s medical providers are in the new medical carrier’s network. By performing a Disruption Analysis, it takes your current providers and cross-checks them against the new medical carrier’s provider network.
For the most part, when a company joins a PEO, the networks are better, the plans are better and the premiums are less expensive. If you are working with a knowledgeable PEO broker, they should ensure all of these things are taken care of for you. If you are interested in learning more about PEOs, feel free to request a copy of our Intro to PEO to get straight answers on PEO.