Choosing a health plan: Five mistakes your company needs to avoid

Does your company want to be an employer of choice? What new options are available to limit your cost exposure? Is increasing worker productivity one of your major goals?

These are just some of the issues to consider when determining your health coverage. It’s one of the most important decisions your company will make, and not just because of its cost implications. Most employees consider health benefits the crown jewel of their compensation packages.

With so many different health plans available, figuring out what’s best for your business and employees is more difficult than ever. Although there is no single “right way” to make this decision, you can learn from others’ mistakes. Here are five common ones to avoid.

1. Not involving your employees. Remember to include employees in discussions about insurance coverage to understand their needs and encourage them to be more responsible for their health and healthcare spending. According to Devon Herrick, health economist at the National Center for Policy Analysis, you should also educate employees to ensure they are aware that health benefits “are not just free money. It’s part of their pay.”

2. Underestimating the value of benefits to employees and your business. Scrimping on benefits to save a few dollars can cost you hundreds more in employee attrition, not to mention your ability to attract the best talent. An Aflac study found that workers who are extremely or very satisfied with their benefits program are six times more likely to stay with their employer.

3. Limiting choices. Your employees differ in a variety of ways – age, gender, ethnicity, marital and family status, health condition, financial situation, etc. — and so do their health coverage needs. Be sure to evaluate the different types of plans available, including the increasingly popular defined contribution design that includes a private exchange, which provides your employees with more plan choices while still letting your company decide what and how many choices to offer.

4. Not considering all the tax implications. This applies not just to your business but also your employees. For example, some employees might appreciate the tax benefits of a high-deductible plan with a Health Savings Account, which gives them a tax-free way to save for future health expenses.

5. Trying to do everything yourself. Few companies have the time or expertise for all the due diligence required to make well-informed decisions. Reach out to the experts and let them do all the heavy lifting. Here’s a good place to get started.


Rising benefit costs is a challenge for all companies. GlidePath, a new solution from Blue Cross Blue Shield of Michigan and Blue Care Network, offers your mid-size company an innovative way to manage spending and risk. It can transform the way you finance your company’s health insurance coverage. With GlidePath’s defined-contribution solution, you can determine your company’s health benefit budget and simplify the administrative work that goes along with offering health benefits.


Photo Credit: quinn.anya

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