If you need an inexpensive way to provide employees with healthcare coverage, your answer might be a "mini-med" plan. "A mini-med plan is a low-cost healthcare plan for somebody who cannot afford traditional insurance or who is not eligible for major medical insurance, like a part-time or hourly employee," explains Jonathan S. Edelheit, vice president at OptiMed/United Group Programs, Inc. (www.ugpinc.com). "It's not meant to replace a traditional major medical plan; rather it's more of a basic policy. It provides access to day-to-day health care such as going to the doctor or getting a prescription drug. It does provide benefits for hospitalization and surgical, but they're limited. It is not meant to be there for catastrophic events."
Mini-med plans generally pay benefits directly to the service provider, based upon the plan's schedule of benefits. A plan might pay $75 per office visit, leaving the employee to pay $25 of a $100 appointment. Edelheit says plans may also have a Preferred Provider Organization (PPO) network. "For our PPO plans, there is no penalty for going out of the network, but there is an advantage to staying in-network--you get a discount on the service. So if you go to a PPO provider for that $100 office visit, you might get a 25 percent discount. The plan still pays $75, so the visit costs you nothing."
Depending on the plan, hospitalization coverage ranges from $100 to $1,000 a day. "A $40 a month plan might pay $200 a day in the hospital. But if you're paying $150 a month for the coverage, you might get a plan that pays $1,000 a day," Edelheit explains.
If you have a high-deductible health plan, you may wonder if a mini-med plan could help employees meet their deductibles. Edelheit suggests that you look instead at a gap plan. "These are meant to go under a high-deductible health plan," he says. "The mini-med isn't necessarily the best fit. It is meant for people without any other form of insurance, so it covers all benefits, like diagnostics, x-rays, wellness, etc. A gap plan, on the other hand, covers you for hospitalization and surgical, maybe even doctors' office visits, but you won't have duplicate coverage." Mini-med plans cost more than do gap plans, too. "When you put a mini-med plan with a high-deductible plan, the rates will usually be the same as if you bought a regular major medical plan. A gap plan is going to be a lot cheaper than a mini-med plan."
Edelheit cautions HR people to make sure they understand what they're buying. "The one thing people need to understand is that this is not major medical insurance. One of the biggest problems we see in the industry is the confusion between two types of mini-med plans: indemnity and co-pay.
"The co-pay plans are commonly referred to as 'smoke and mirrors' plans, because they are purposely designed to resemble a major medical plan. HR people often make the mistake of thinking that, because it resembles their major medical plan, it's the one to get. They misunderstand it, they communicate it wrong to the employees who go out and use it and find it doesn't work like they thought it would.
"The easiest way to avoid the problem is to get an indemnity plan that pays out set benefits. There is no co-pay, no deductible, and no co-insurance. The plan says, for example, if you go to the doctor, you get $75 per visit. If you go to the hospital, you get $500 a day.
"There is no room to be confused. I find that to be the best approach, because nobody ever feels they had something misrepresented to them, or that they didn't understand it."
can't afford health insurance? Well, there's new companies, organizations watching as their profits evaporate to higher costs, and companies competing for part-time or hourly workers. In short, health insurance is becoming less affordable just as employees are becoming less available.