Benefit trends and solutions.

Businesses of every size consider offering benefits to their employees. Yet, complexities surrounding the process can I be overwhelming. Larger companies may have an experienced benefits coordinator to assist with the task of selecting a plan, funding premiums and administering benefits. Smaller companies may not have these resources and consequently struggle to develop programs on their own. Take a moment to review the trends and solutions below to better assist in making educated choices about health and financial related benefits.

Why should you offer health care coverage?

Offering health care coverage to your employees increases the viability of your business by attracting new hires and retaining existing employees. For many, securing health care coverage through their employer is a valued benefit of employment and considered a very important part of their compensation. Providing employees and their families with access to health care services can give employees piece of mind.

What are your rights?

Existing Federal and California legislation govern various aspects of how insurance issues are administrated. California Assembly Bill 1672 (AB1672) is key legislation, developed to increase small business access to health care coverage. Under this bill, small employers with 2-50 employees cannot be denied medical group coverage based on health status of employees. Key provisions include:

Guaranteed issue and renewal of small group policies--You cannot be turned down for coverage, nor terminated as long as premiums are paid;

* Rules on small group rates;

* Limitations on pre-existing condition exclusions, and

* Requirement that plans and brokers provide fair information about all products

* Why is it so expensive?

Overall medical costs are rising. Health care spending in the first six months of 2003 grew nearly three times faster than growth in the overall economy. Consumers want and deserve access to the best health care available for themselves and their families. This includes high-tech procedures, advanced drug therapy treatments and other innovations. Most health plans offer stability in pricing products to cover such anticipated medical expenditures.

What are my options?

Contrary to what most may think, there are affordable solutions available to employers. Working with a professional, selecting a plan and funding premiums may be easier than you think.

Follow the steps below to get started:

Work with a selected professional--Work with a local agent or broker. Most of these professionals know the plentiful offerings available by carriers. They also are required by department of insurance to remain current on recent legislation and other matters relating to the industry. Another option is to visit the website or call the health insurance carrier of your choice. Most carriers such as Blue Cross of California (Blue Cross) have interactive websites or 800 numbers to call with experienced agents who are willing to answer questions and navigate you through the process of selecting and administering a plan.

Select a plan--New employer-friendly plans are emerging for small business owners seeking additional ways to maintain their coverage in light of increasing costs. Innovative plans and funding vehicles make offering health insurance possible for employers such as HSAs and other financing mechanisms.

Examine Funding Options--Employers often believe they have to pay 100 percent of the premiums and are unaware of the tax advantages of offering benefits to their employees. New employer-friendly plans are emerging for small business owners seeking additional ways to maintain their coverage in light of increasing costs. Innovative plans and funding vehicles make offering health insurance possible for small businesses. For example:

Blue Cross offers a defined contribution option which allows the employer to contribute a certain dollar amount per employee, per month. The remainder of the premium is contributed by the employee based on the plan they select.

The Power Health Fund plans, offered by BC Life& Health, a subsidiary of Blue Cross, do the math for you. They are offered with $500 and $750 first dollar coverage amounts (this is the amount the plan will pay for expenses up front). The plan tracks the amount of out of pocket expenses incurred.

Generic prescription drug benefit options are a unique tool now being addressed to reduce overall costs associated with a health plan. Blue Cross recently announced a Preferred Provider Organization $35 GenRX plan which keeps premiums low and benefits high with a plan design that features safe, fully effective generic only drug coverage.

In addition to the above steps, be cognizant of new resources and administration options that will provide you and your employers with greater access to health coverage. For example, Blue Cross recently expanded eligibility to small businesses by making it easier for businesses with part-time or seasonal employees, private households staff and Medi-Cal enrollees to apply, and be accepted for, coverage.

Practices that can keep costs down

* Encourage the use of less expensive, generic prescription drug alternatives.

* Promote use of health and wellness programs offered by plans at little or no cost.

* Take advantage of voluntary health improvement programs for members with chronic conditions such as asthma and diabetes to help manage disease and reduce the need for emergency treatment.

* Remain insured. Costs associated with a single unforeseeable event can be financially and emotionally devastating.

There are many reasons for offering a comprehensive benefits package inclusive of health care coverage to your employees. California legislation offers certain protections for smaller businesses seeking access to health care coverage. Now more than ever, employers have access to many group benefit programs available in the market. By understanding your options, you can secure affordable, quality coverage for your employees. For more information on how to secure coverage for your business, contact your local agent, visit: http://www.bluecrossca.com or call 800-999-2273.

Brian Sassi is general manager of small group business for Blue Cross of California.