Evaluate health plans - MedECalc - PC Power - Evaluation

Evaluating benefit plans in detail - thank goodness it only happens once a year. Who could survive the river of details more often than that? What's that, you don't actually do the nitty-gritty work of evaluating your plans? How fortunate you are that you have a consultant (or broker, or third-party administrator) to do it for you. But what, your company is trying to break away from using a consultant? Do you know what that means? You could be adding an interesting new dimension to your benefits experience when it next comes time to renew insurance plans. If your company is looking to entertain new carrier bids this year, such an experience will be particularly "character building" for you.

But maybe not. Instead, you could try Med *E* Calc, a health-plan evaluation and analysis package we looked at, Like most software applications, it doesn't work by simply pushing a key, but it does reduce a substantial part of the workload.

What it does

This program uses the data you enter for each of your indemnity, medical, dental, vision, hearing, HMO and PPO plans to calculate a value for each. Considered by itself, the value is limited, but it takes on greater meaning when compared with other plans with identical coverage. Such other plans might include last year's dental plan, another one of your health carriers' dental plans, or a bid for a dental plan from a proposed new carrier.

As is suggested in the "Tips, Tricks and Common Questions" section of the user manual, Med *E* Calc is perhaps best used to help you detect inflated costs or outrageous overpricing; make you aware of excellent deals when you encounter them; or provide a reference for estimating the costs that accompany plan changes.

As you would hope, there is a report writer that allows you to set up your own ad hoc reports, and it's very easy to use. It also houses a selection of standard reports, mostly for displaying your tables of necessary items, such as carriers, coverages and companies. For the beginner, the most important feature of the report writer is the availability of several other standard reports, such as the plan efficiency comparison and the HMO analysis. Without these reports, one might not know where to begin once the data is entered and the plan values are calculated.

What we like

We found the program easy to install - it can almost be done without instructions. Then, between the simplicity of both the help messages and the data entry screens, we were able to take ourselves through the entire program before we looked at the documentation.

Because the program is user friendly, it is obvious that it was developed by people knowledgeable in the subject matter, not just in software development. When we became curious about how the plan value was obtained, we found that the user manual includes an appendix item on the valuation methodology, based on the American Academy of Actuaries' proposed methodology for Valuation of Accident and Health Plans Under Section 89-valuable information that we may not otherwise have had easy access to.

With such information, we felt a level of comfort and confidence in the calculation. At the same time, we were not overloaded with details of the methodology, specifically those beyond what we needed to know in order to produce the plan values from the system.

When we called the technical support number, the product analyst was not in the office but promptly called us back from another location. We took this to indicate that the technical support staff has an understanding that "the show must go on" for those of us trying out the product - a good sign.

What needs improving

Although adequate in its organization and use of both the layperson's language and the screen illustrations, the documentation lacked explicit explanation of how to use the value we would arrive at after we had performed all that entry of plan provision data.

The overview within the introduction section was of some help, but reading the manual's "Tips, Tricks and Common Questions" section was necessary for our understanding. What we wanted from the documentation was to be all but knocked over with an explanation.

Suggestion

Better not try to pass the data entry job on to a support staff member if he or she doesn't handle the details of your plan provisions on a regular basis. An in-depth knowledge of a plan is required to be able to complete the record for that plan, and even then, you are certain to need a good deal of time verifying your entries.

In fact, performing the data entry yourself gives you an opportunity to get to know your plans even better than you do now. So keep in mind that you should have your summary plan descriptions and the latest premium statements for each plan in front of you when you begin your data entry. In fact, the user manual suggests you summarize your plan provisions on paper before putting them in the system.

Another bit of advice about installation: Don't do as we did, which was to interpret literally that 2 million bytes of unused space are all that are needed on your hard disk. If you have between 2.1 and 2.2 megabytes as we did, it may not actually be enough, even though you get a message that says installation is complete and successful.

To sum up

For most benefits administrators, this program probably does not automate a function they are now doing manually, but it does bring a consultant/broker function in-house (although this is only one of many such functions). In some organizations, particularly smaller ones that might skimp on analysis of their health plans before negotiating carrier rate changes each year, it might mean that such analysis actually does take place.

But if you are a benefits administrator who has been performing yearly, manual evaluations of your plans, be very careful about trying and demonstrating this software. If you think you might not be granted approval by management to purchase it, you may wish you didn't know how well it works.

Leslie Marshall is a benefits specialist with American Medical Laboratories (AML) in Chantilly, Va. Nancy Howe, PHR, HRIS specialist with AML, is a member of the National HRIS Committee of SHRM, a joint committee of the Society for Human Resource Management and the Human Resource Systems Professionals,

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