Commercial Insurance

Choosing a Group Health Plan

When it comes to buying health insurance, there's  strength in numbers. That's why 70 percent of Americans get their health  insurance through their employers. And that's why larger companies enjoy a better bargaining position than their smaller counterparts when it comes to  selecting an employee health plan.

Because a health insurer is more likely to sit up and  take notice when a large employer is on the other side of the bargaining table, businesses have begun to band together into "purchasing pools," or coalitions  that use their collective clout to negotiate more successfully. Two trade groups in Washington, D.C., serve as umbrella organizations for these purchasing pools.  The National Business Coalition on Health (NCBH) is made up of larger employers who team up for better bargaining power and the National Federation of Independent Business (NFIB) represents small employers who, in many
cases, may be struggling to find any affordable health plan.

"Small businesses would love to be able to have the  flexibility that large ones have," says Jim Weidman, spokesman for the NFIB. He  notes that they're often at the mercy of "off-the-shelf" policies with little flexibility, whereas larger, self-funded company benefit plans that aren't  subject to state regulation can tailor their offerings.

"Small businesses focus on cost because they're  buying an insurance product through the state-regulated market," says Karen  Hertz, director of member services for NBCH. Her organization is made up of regional coalitions of mid-to-larger-sized employers.

Unlike smaller businesses, where availability is still the key issue, larger businesses can concern themselves more with the  quality of care they're offering their employees. "A lot of our members are  involved in health care quality-improvement initiatives," Hertz told INN. "A coalition makes better bargaining power." Using their collective clout, they can  request information from different hospitals and care providers to get a sense of the quality of care offered.

Decisions, Decisions

Regardless of whether you're a small company or a large one, you'll want to make sure you're getting your money's worth out of a health plan...

Collective Pool

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