How to compare two health insurance quotes
Two carrier quotes, one client, and a meeting on Thursday. This is the method an account manager or benefits admin can follow in under an hour with a spreadsheet, in the order that catches the mistakes before the client does.
Before you start
Have both quotes, the Summary of Benefits and Coverage for every plan on them, the current census, and the employer contribution rule in front of you. If the rates arrived as a table in an email or a portal, the rate sheet to spreadsheet converter moves them into a CSV without retyping; the group health insurance comparison spreadsheet has the rows below already laid out.
1. Put both quotes on the same footing
Check that both quotes use the same coverage tiers (employee, employee plus spouse, employee plus children, family, or the three-tier employee, plus one, plus two or more), the same effective date and the same census. A quote built on last year's enrollment or a different tier structure is not comparable until it is re-run.
2. Pull the same fields from each, in-network only
For each plan, record the same set of values: network type, individual and family deductible, individual and family out-of-pocket maximum, primary care and specialist copays, urgent care, emergency room, inpatient and outpatient cost sharing, the four prescription tiers, and whether referrals are required. Use in-network values only and note the page each number came from.
3. Mark the deductible type and the out-of-pocket maximum
Write down whether each family deductible is embedded (one member can meet the individual amount) or aggregate (the whole family amount must be met). Two plans with the same family deductible can cost one household very different amounts. Then compare out-of-pocket maximums, because that is the number that caps a bad year, and a lower deductible with a higher maximum is not the safer plan.
4. Line up the rates and compute the employee cost per paycheck
Enter the monthly premium for each tier on both quotes. Apply the employer contribution the same way to both (a percentage of the employee tier, a percentage of every tier, or a fixed dollar amount), then divide the employee share by the number of pay periods. Employees compare plans on the paycheck number, not the monthly premium.
5. Check the network and the formulary against the group
A cheaper plan with a narrower network is not cheaper for the employees whose doctors fall outside it. Check the group's key providers and hospitals against each network, and check the drugs the group is known to use against each plan's formulary tier. Neither of these shows up in a rate comparison.
6. Present the difference as three numbers
For each plan show the monthly employer cost at current enrollment, the employee cost per paycheck at each tier, and the worst-case individual out-of-pocket (deductible plus the rest of the maximum). Those three rows answer what the business pays, what the employee pays, and what happens in a bad year. Everything else is supporting detail.
The two comparisons this method does not cover
If one quote is fully insured and the other is level-funded, the premium and the fixed monthly cost are not the same kind of number, and step four needs the maximum liability on the level-funded side before it is honest. Level-funded vs fully insured covers that. And if the two quotes are a PEO's master plan and a standalone plan, the admin fee and the bundled services belong in the comparison; the PEO benefits comparison guide has the five dimensions.
Common questions
What is the fastest way to compare two health insurance quotes?
Put them on the same tiers and effective date, pull the same fields from each in-network only, apply the same employer contribution to both, and compare three numbers: monthly employer cost, employee cost per paycheck, and worst-case out-of-pocket. A quote that cannot be put on the same footing has to be re-run before it can be compared.
Why do two quotes with the same deductible cost employees different amounts?
Usually because one family deductible is embedded and the other is aggregate, or because the out-of-pocket maximums differ. An embedded deductible lets one family member meet the individual amount; an aggregate one requires the whole family amount first. The out-of-pocket maximum, not the deductible, is what limits a bad year.
Should I compare monthly premiums or per-paycheck cost?
Both, to different audiences. The employer decides on the monthly cost at current enrollment. Employees decide on what leaves each paycheck after the employer contribution. Show the employer figure first and the per-paycheck figure for every tier beneath it.
What does a rate comparison miss?
Networks and formularies. Whether the group's doctors are in-network and whether its common prescriptions sit on a low tier are not on any rate sheet, and they decide whether the cheaper plan is actually cheaper for the people on it.
Where to go next
The employee benefit deduction calculator does step four for one plan at a time. When the comparison is three carriers rather than two, how to automate a benefit quote side-by-side walks through the same steps with the carrier files read by plan comparison instead of by hand.