Mandated benefits (also called mandatory health insurance benefits and mandated health insurance coverage) are a set of benefits that are mandated to be paid by an employer or the state to cover the costs of certain healthcare services and/or certain categories of family members, including children who are placed in foster care. The costs of mandated benefits vary from state to state and are typically determined by the type of plan that is being implemented. However, in most states, mandated benefits consist of emergency room visits, doctors’ and hospitals’ fees, and pharmaceutical benefit payments, among other services.
Most states mandate both insurance benefits and state employee health plans through employers. However, there are also many private sector-based insurance companies that can offer these services. In most states, private sector-based companies are required to provide insurance benefits to their employees or they can be fined. To attract business, several states promote group insurance by offering financial incentives to large and medium sized companies that elect to participate. Additionally, in many states, healthcare cost management is offered to employees who may need to reduce healthcare use, which can help to stabilize the rising costs of healthcare services. Mandated benefit plans often differ by state.
States that require insurance benefits and state employee health plans also experience shorter claims periods. Because most people are covered by insurance benefits, costs associated with mandated benefit mandates tend to be very small. However, insurance costs can increase quickly when mandated benefits are implemented and sometimes the rates increase even faster than the rate of inflation. For this reason, it is often wise to consult with an experienced healthcare cost management consultant to determine whether a mandated benefit or insurance coverage is right for your company.