Small Businesses Push the Envelope in Health Benefits for Employees
Some small businesses have begun collaborating with not-for-profit groups and hospitals to provide discounted care to their employees, the Wall Street Journal reports.
Under one such program, called a "three-share" system, employers and workers participating in the plan each pay one-third of the costs.
Meanwhile, a not-for-profit group finds other sources, such as the government, foundations or hospitals, to pay for the other one-third.
Hospitals participate by offering reduced rates for care.
According to the Journal, the program reduces costs by avoiding many "extra costs" associated with traditional insurance.
The Journal profiled a three-share system offered by University of Texas Medical Branch hospital and a small printing company that is enrolled in the program. UTMB's plan is not recognized as "insurance" under state law and therefore is not subject to state requirements for how much money it must have on hand if claims increase.
The plan avoids competing directly with traditional insurers because it markets only to small businesses that have not offered health coverage to workers in the previous 12 months.
The three-share plan is not required to provide certain types of care, such as inpatient mental health treatment or inpatient alcohol and drug-dependency care. Also, patients have less protection if the plan fails because, unlike traditional insurers, it is not required to have a coverage fund to which it is required to contribute in the event it closes down.
Patients are not able to appeal to state insurance regulators in the event of a coverage dispute.
In addition, the plan would be inadequate for people with certain chronic conditions or catastrophic illnesses, according to the Journal.However, such plans do provide an option between traditional insurance and so-called limited-benefit plans, which typically have reduced coverage limits and usually are marketed to part-time or temporary workers, according to Randy Giles, CEO for South Texas for UnitedHealthcare (Rubenstein, Wall Street Journal, 4/14). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.