Administrative efficiencies focus of meeting on small business health care costs | J.R. Claeys for Kansas Secretary of State

Thursday, July 24th, 2008

By J.R. Claeys

This week I had the pleasure of meeting in Dallas, Texas with representatives of several major health care companies to learn more about the steps they are taking to lower health insurance costs.

"Lower" is a subjective term in health insurance. Really, it should read "slowing the rapid increase that is forcing many small business owners out of health insurance altogether" but the steps being taken in two areas of health care are worth noting here.

First, we discussed new systems for online enrollment that allow for the consumer to choose their plan with audio and video guidance, enroll online and add or subtract employees online. Add online billing and this new method being introduced with several different plans this year virtually eliminates paperwork. The benefits are obvious: immediate enrollment and coverage, simple employee benefit management and the saving of a few trees while we're at it.

Next, we talked about plan design options for businesses. Since the introduction of Health Savings Accounts we've seen an increase in high-deductible major medical plans. But many employers and employees don't want the up front cost of those plans, even with the lower premiums. We discussed mini-med plans, or "indemnity plans" that offer defined amounts of coverage that is less than what a normal "major medical plan does. These plans can be appealing because of their low cost, however I shared my feeling that the plans can be easily misleading to a consumer. We discussed further ways of educating business owners on the differences in these plans and the coverage they provide.

Finally, we ended with a roundtable dialogue on the differing state regulations and what companies are doing to meet the requirements of each state while maintaining economies of scale in their plans. I cautioned against a national regulation and voiced my support for state protections for consumers.

We will be revisiting these issues as these new products begin penetrating the market. It is my hope that small business owners will look closely at all the options out there and make a good decision for their business based on good information.