Providing health insurance for the employees of your growing business is becoming more and more expensive each fiscal year. If you’re looking for alternatives that offer appropriate coverage while staying within your budget, looking into the option of health share plans can be a great place to start. Read on to explore the pros and cons of health share plans so that you can make the best decision for your company’s unique needs.
What is a Health Share Plan?
Health share plans, also referred to as health share programs, are organizations made up of individuals who share the cost of the group members’ health care. Members of the health share plan define which medical expenses are eligible for coverage. Members are required to contribute a pre-set amount, usually monthly, in order to fund the health share plan.
Is a Health Share Plan the Same Thing as Health Insurance?
No, a health share plan is not the same thing as health insurance. In fact, there are significant differences between the two programs. Health share plans are typically “cooperatives,” run by non-profit entities. Health share plans are unique in that the members themselves, as a group, get to choose which health expenses are eligible for coverage, and which are not.
Health insurance plans, on the other hand, are regulated by the federal government, specifically through the Affordable Care Act, which mandates certain expenses to be covered in any event. In general, health share plans are subject to far less governmental intervention. Many states have passed laws exempting health share plans from most regulations applicable to health insurance plans.
All in all, there are many benefits, as well as drawbacks, to this particular type of coverage.
What are the Pros of Health Share Plans?
- You May Be Able to Save Money with a Health Share Plan
Because health share plans must adhere to far fewer regulations than health insurance plans, health share plans are often able to charge their members lower premiums. The trade-off is that many of the expenses the health share plan has deemed ineligible for coverage will ultimately be borne by individual members. This is a “pro” if your employees are mostly young, healthy, and unlikely to experience any major health events.
You Can Be More Selective with Your Health Care Providers
With a health share plan, you have more control over which providers you select. Typically, you won’t run into a problem of a provider being “out of network,” as you would with regular health insurance. With a health share plan, you’re also eligible for broader coverage for holistic medicine and providers, unlike under most health insurance plans. Holistic health care may extend to midwifery and chiropractic operations, so long as the treatment is deemed eligible under your health share plan.
There is Typically no “Open Enrollment” Period for Health Share Plans
Another group of regulations that health share plans are not beholden to is the swath of rules surrounding the normal “open enrollment” period. Individuals with health insurance are typically only permitted to enroll in their insurance plans during a set time of year unless they’ve experienced a pre-defined “QLE,” or qualifying life event. With health share plans, there are typically no open enrollment periods or QLE requirements, and members can join (and leave) the plan as they see fit.
Health Share Plans May Offer More Transparency
With health insurance plans, members have essentially no idea where their premiums go. Overhead costs, profits for the corporation, compliance costs, salaries for executives, and even attorneys’ fees factor into your monthly premium. Because health share plans have far fewer fixed costs, you may save money—and because members have so much control over what costs are eligible for coverage, you may also be able to avail yourself to the benefit of greater transparency. Knowing what premiums actually pay for can be a major “pro” for some.
What are the Cons of Health Share Plans?
You’ll Still Have A Deductible
It’s important to remember that health share plans cannot be used in conjunction with reimbursement plans, such as health savings accounts. So while you might have lower premiums with a health share plan, you could still have a high deductible—if not a higher deductible than you would with an insurance plan. Don’t be fooled by the health share plan’s language, “annual unshared amount.” The annual unshared amount just means an amount that you won’t be eligible for coverage for; in other words: a deductible.
Fewer Regulations May Be a Negative
As we previously discussed, health share plans are governed by far fewer federal and state laws. They’re also not subject to Affordable Care Act standards or requirements. While some individuals may see this as a “plus,” others may be concerned about the lack of consumer protections associated with health share plans. This problem may come into play if a member of a health share plan is involved in a dispute with their plan. Individuals enrolled in a regular health insurance policy may have stronger methods of recourse if and when their insurance company fails to follow through on the provisions of the member contract.
Potential Lack of Coverage
Some health share plans do not cover pre-existing conditions at all, and some others will not cover pre-existing conditions until the member has paid into the plan for a pre-set number of years. Health insurance plans, on the other hand, are required by the federal government to cover members with pre-existing conditions. And because the members of health share plans themselves get to select which treatments and costs are eligible for coverage under the plans, health share plans are never required to cover anything.
Health share plans are allowed to require their members to have a certain healthy lifestyle for membership and can even deny treatment for a condition based on the circumstances involved in the associated illness or injury. Health insurance plans are not allowed to be exclusive. In brief, health insurance plans are more comprehensive simply because they are mandated to be.
With a Health Share Plan, You Sacrifice the Benefits of Bargaining Power
Health share plans are smaller by nature, having fewer members and generally less resources. Individuals enrolled in a traditional health insurance plan benefit from the discounts their insurance company has negotiated for its members, and the lower prices they’re able to set in place at hospitals and through major medical providers. With a health share plan, you give up a certain bargaining power that can help keep major costs low, or at least under an established ceiling.
Choosing the Right Coverage for Your Organization
If you’re carefully weighing the pros and cons of a health share plan for your business, you already know how important it is to make the best health coverage choices for your company’s employees. Would your organization benefit from access to certified HR experts? If so, it’s time to contact Benely.