What issues occur when changing medical insurance mid-year?

Question

I received an e-mail from our HR Department the other day informing us that they may change our medical insurance carrier on June 1st. For context, our company has approximately 50 employees and is located in the US, so employer medical insurance is a benefit.

Due to the size of the company, I am able to have the ear of upper management very easily and I would like to discuss this issue with them, but would like to ensure I've addressed all the issues in one go. Ideally, I'd like to ensure that I get a response that addresses each issue in some manner. So far, I've identified the following concerns:

• My current insurance has a deductible of at least $1,000 that I've already met. If the carrier changes, I'm assuming that I'll need to start anew on that deductible.
• I am concerned that I will have to change doctors.
• A mid-year change like this is unprecedented for me. Every other company I've worked for has had their insurance renew at the beginning of the year, presumably to avoid this kind of issue.

Are there other major issues that I should be raising? I am not seeking a list of everything that could happen, just issues that would be universal to all employees impacted by this.

Answers responding to the issues I identified above are not what I am seeking. I am just asking what other major issues are likely to occur due to this change. I am not seeking answers to those issues, I am trying to have a conversation with management on the issue.

Answer 1

From a comment you made

I've been here for a little over a year now.

and from your question:

A mid-year change like this is unprecedented for me. Every other company I've worked for has had their insurance renew at the beginning of the year, presumably to avoid this kind of issue.

Changing in the middle of the calendar year is not a problem if the company has always been running their insurance year as different than the calendar year.

I have worked with several companies that operated this way. Changing policies/companies mid-calendar year wasn't a problem with deductibles, because you still had/have 12 months to reach the deductibles.

Changing doctors is always a concern when you change insurance policies, even if the change takes place at the end of the calendar year.

The biggest issues with mid-calendar year changes has been related to federal laws. If the US government changes the rules for a flexible spending account, or a HSA, then there can be confusion regarding how those laws are phased in to a plan that doesn't start on January 1st.

Now if this isn't normal for the company, then most of the employees should be upset. The impact on deductibles and out-of-pocket limits should make everybody concerned. There can also me confusion of expiration of funds for the Flexible spending account.

Answer 2

Are there other major issues that I should be raising? I am not seeking a list of everything that could happen, just issues that would be universal to all employees impacted by this.

The list you have so far is a pretty good start, depending on the goal of your meeting with management.

You might wish to ask if your medical records will be automatically transferred to the new insurer or if you'll need to deal with this yourself.

I think you are unnecessarily concerned. This sort of change isn't all that unusual. It happened to me with several employers. And it's exactly like the change you might expect when getting a job with a new employer.

I also think you should be discussing this with HR, rather than bothering upper management, but you know your employers better.

Answer 3

My current insurance has a deductible of at least $1,000 that I've already met. If the carrier changes, I'm assuming that I'll need to start anew on that deductible.

Not necessarily. "People with employer-sponsored group health insurance plans may be eligible for deductible credit transfers. If a business owner changes to a new group health plan provider, it’s usually required that members of the group be employees who were enrolled in health insurance coverage before the switch to claim a health insurance deductible transfer." https://www.healthmarkets.com/resources/small-business-health-insurance/deductible-credit-transfer-in-a-health-plan-switch/ You should discuss this with HR and/or the new company. See if you can get deductible transfer as part of the negotiations.

I am concerned that I will have to change doctors.

Possibly. Again, something to discuss.

A mid-year change like this is unprecedented for me.

Not really an argument in and of itself.

Answer 4

With fifty people in the company you will certainly not be the only one with these questions. And, they're very reasonable questions to ask. There is no harm whatsoever in asking them. Nobody will think ill of you for asking these kinds of questions.

This kind of change is common. Companies and insurance carriers know how to do it. Many insurance carriers send a representative to the company in the weeks before a change to explain the situation and answer questions. Your bosses will probably offer a couple of chances for you and your co-workers to meet with the representative. You can ask your questions, and you can expect straightforward answers.

Somebody will ask about pharmacy benefits, and another will ask about vision/eyeglasses benefits. The same goes for dental benefits if you have them. A person who travels a lot may ask what happens if I need care when I'm not around here. And, if there's some kind of Healthcare Savings Account scheme to help cover your deductibles, someone will ask about that. And, hopefully you'll all receive a book describing all this stuff.

In the conversation between the insurance person, you, and your co-workers, you will very likely get a very clear picture of the changes coming. If you don't think of an important question, a co-worker will. Knowing every possible question is not on you.

Somebody in your company will say "if you have any other questions, ask me." Write that person's name and email down; you may need help in a few months.

One thing to keep in mind: dealing with health insurance is a difficult and unpleasant task for your company's executives and HR people. It takes a ridiculous amount of time. Finding a reasonable deal both for the company and the employees is very hard and frustrating. If you lead by saying "thanks" for doing that work, you'll probably get a better hearing. And, if you ask them to start over to find a different deal, they probably won't want to do that.

Answer 5

Having spent a significant portion of my career leading a team that wrote and implemented plan configuration software for what was one of the largest third party payors in the US healthcare system, I can address your concerns based on having been involved in several hundred implementations.

In your question, you listed some potential issues, and then you made emphasis on the following question:

Are there other major issues that I should be raising? I am not seeking a list of everything that could happen, just issues that would be universal to all employees impacted by this.

It's important to preface this with a fact: unless you have a union contract that explicitly defines benefits, or some other similar mechanism in place, things like mid-year changes to health insurance benefits are essentially entirely up to the employer. They can change benefits, plans, deductibles, provider networks, premiums, or any other aspect of the benefit at will.

That said, the answer to your question is Yes - there are definitely other potential changes, some of which may be significant. You've identified the potential for deductible (and other) accumulators to reset as of the change, and the potential that you'll be served by a different provider network (this you may have to change doctors). You've missed two significant potential changes:

• Changes in benefits. When switching to a new insurance plan, the employer may choose to change benefits and/or the structures of the plans offered - for instance, they may introduce a new HDHP option, or they may change copays, or what's covered in a specific plan. The new insurance provider may not even offer an equivalent set of benefits, so their choices may be limited. Essentially, the entire structure of the benefit is up for grabs - although, employers understand that unexpected changes in benefits are disruptive, and in general, changes to benefits are avoided by employers unless there's a specific reason to change them.
• Changes in premiums. The new insurer will have their own underwriting and their own cost structure - the premium equivalent will almost certainly be different, even if the employer chooses to keep all benefits and other features equivalent. Again though, this doesn't automatically imply an impact for you the employee, since in most cases, the employer is paying a portion of your premium for you - this means that any cost difference may be absorbed by your employer, instead of being passed on to you.

Although you didn't ask for feedback on the issues you did raise, I'll add a few quick notes given that there is some incomplete or slightly misleading info elsewhere in the responses to your question:

• Changes in provider network: you mentioned concern over having to switch doctors. Although this does happen, insurance plans put effort into trying to reduce it. The new plan will be doing a disruption analysis on claims from the old plan, which will show them the differences in utilized providers between the networks. This analysis will basically get converted into a list of leads for the new plan's network development team - they will go try to recruit the providers into the new network. So even if the disruption report shows 95% coverage, by the time the plan is actually live, there may be 98% or more. Plus - it's worth pointing out that if you have a favorite provider that's not in your new network, it's worth mentioning both to the provider and the plan that you would like them to be in the network. Generally, providers and plans are willing to work on issues like this, once they're made aware of them.
• Deductible resets: You mentioned having a $1000 deductible that you've already met, and concern that it will reset to zero. There's no hard and fast rule about how deductible and other accumulator (max out of pocket, visit limits for things like physical therapy, etc). resets happen - it's essentially a point of negotiation between the employer and the plan. It's fairly common that the accumulators will be transferred to the new plan, which means it won't reset.

Answer 6

Those are all valid questions to ask, however you may not like the answers. Regarding the deductible, it is basically reset with a new insurance. The same applies to the list of plan approved doctors. Just remember that in the US your company can legally change insurance plans whenever it wants, even in the middle of the year. It is not something typical ( in the middle of the year ) but it can and does happen.

Presumably, management would have the same concerns that you have as they are likely enrolled under the same insurance company. Obviously they have a reason for considering switching insurance companies ( usually it is monetary) and If they haven't already considered the points that you have brought up and depend on you to make the argument against switching mid-year then there is a huge management problem at your company.