ConnectiCare has a new suite of health plans that attempt to accomplish two goals in an environment of rising health insurance prices and medical costs — allowing employers to cap the amount they spend on workers’ insurance while offering employees a wider selection of health plans available from their employer.
Farmington-based ConnectiCare announced this week its BeneFIT line of health plans, which allow employers to give workers a defined contribution — a set amount of cash toward health coverage. The worker pays the remaining part of the price, which can be more or less expensive depending on which plan she or he picks.
The BeneFIT suite offers as many as 11 health plans instead of the 1-to-3 plans typically available in the past.
In the health insurance industry, when employers give a set amount of money to workers for medical coverage, it’s generally called a “defined contribution.” ConnectiCare calls this model “flexible contributions.”
“Employers choose a contribution level that fits their budget and employees choose a plan to fit their needs,” said Michelle M. Zettergren, chief sales and marketing officer for ConnectiCare.
The BeneFIT health plans are fully-insured, meaning that ConnectiCare pays medical expenses, rather than a self-insured health plan in which the employer pays for medical costs and charges workers a premium. ConnectiCare is offering BeneFIT to businesses with at least 51 employees.
The employer will likely pay less than they have in the past, but will still pay at least 50 percent of the plan.
Rising medical costs, and the ever rising price of health insurance, has led employers to seek new ways of offering coverage to workers. In some cases, an employer no longer offers employer-based health insurance. Instead, the employer provides cash to workers so they can buy health plans on the individual market.
For example, Sears Holding Corp. said in September it no longer funds a health plan for workers. Sears joined a private insurance exchange in which about 90,000 workers shop for coverage and Sears pays a portion of the price, according to the Chicago Tribune.
Next year, public health exchanges in each state will allow individuals to compare and shop for plans, which is a part of federal health care reform. The open market for health insurance may compel some employers to stop offering coverage.
In June, a J.D . Power and Associates survey found 47 percent of 6,579 employers surveyed plan to change the way they provide health insurance to workers — offering them a set amount of cash to buy their own plan rather than providing coverage and charging employees a portion of the premiums.