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Health Insurance Plans

Health insurance ranks up there as one of, if not the top, benefit that employees seek when looking for a job. Regardless of the size of your business, you need competitive health insurance options for your current and prospective employees that are affordable, comprehensive, and reliable.

Few companies still offer traditional health insurance. It’s simply too expensive and isn’t a feasible option for most businesses. Instead, the majority of businesses offer one (or more) of three different plans: HMO, PPO, and POS (for more information, read Types of health insurance.)

These three plans are considered employer-sponsored health care plans. This means they employers and employees make decisions based on their individual needs. Both parties share the costs of the premiums with employees responsible for a smaller percentage but all of the co-payments and prescription fees.

The decision of which plan to work with comes down to how much employees can afford to pay per paycheck, how much you can afford to take on, and how government initiatives can change your plans. It’s best to offer multiple plans and let the employees decide what’s most important to them.

Types of health insurance

Traditional insurance: This offers the most flexibility for employees. They can visit any doctor or hospital they choose to receive treatment. They also don’t need insurance company referrals. Traditional insurance plans are highly expensive for employers and employees who pay more out of pocket fees for deductibles and co-insurance.

Health maintenance organizations (HMO): An HMO consists of a network of doctors and hospitals. The primary focus of an HMO is to cut costs wherever possible to create the most affordable solution for businesses and their employees. While the least expensive, it also offers the most limited flexibility. Participants must choose a primary care physician (PCP) and then get referrals to other specialists. And if you go outside the network, prepare to pay up to the tune of 100% of your medical costs! If you already have a doctor who isn’t on the network, you’ll have to change over to get coverage.

Preferred provider organizations (PPO): This is the top choice of most businesses. A PPO consists of doctors and hospitals willing to offer care to members at a lower cost. It’s a bit pricier for businesses to offer, but provides far more flexibility than other plans. You can select health care professionals associated with the PPO and then pay a low deductible and very low (if any) co-insurance. A PPO encourages members to use affiliated providers in the network to keep overall costs low.

Point of service (POS): A POS plan offers the benefits found in HMOs and PPOs. You still need to select a PCP and get referrals to other physicians, but you can go outside the network without a referral and get most of your expenses covered. POS plans cost more than in-network services (with higher deductibles and co-insurance payments.)

Consumer-driven health care: This option puts individuals in charge of their health care expenses. It’s usually reserved for very large companies. With consumer-driven health care, both the employer & employee contribute pre-tax dollars to a health savings account. This is then grouped with an insurance plan that features a high deductible. Participants can use these funds for routine and preventative expenses and any leftover funds can be rolled over for future years.

Before you decide on any plans to offer your employees, be sure to speak with multiple vendors first. By submitting a free request for quotes through HR Research Center, we can connect you with at least three different health insurance companies that can help you find the plan that works best for your business.

What to look for in a health insurance plan

Here are some of the key attributes to a reliable health insurance plan:

Policies & reimbursement: Check payment limits so severe illnesses and treatments are covered. Beware of low reimbursement levels - if a provider pays less than what a physician charges for treatment, you could be left holding a costly bill.

Flexibility isn’t everything: While most employees want a more flexible health insurance plan, the higher-than-normal deductibles and co-insurance fees could add up.

Coverage: Most health care plans will likely cover hospital stays and emergencies. It should also cover outpatient needs like exams, lab work, and office visits. Find out exactly what is included as plans can vary. Also, look at the proposed treatments for mental health or substance abuse issues if that’s important coverage for your employees.

Physicians: Learn what the health insurance provider’s methodology is for screening and selecting doctors for the program (background checks, previous malpractice suits, years of experience, board certification, etc.) Make sure these physicians actively accept new patients so you don’t get shut out. Also, look for doctors with a low turnover rate of 3% to 5%; otherwise, you’ll be looking for a new doctor before long.

Disputes: If you are denied reimbursement, the plan should provide a reliable way to file grievances. You will have to present your grievance to a board of professionals to render a decision. Look into your state’s Department of Insurance Records to read up on complaints of specific services so you don’t select that one.