Health Insurance Pricing

Good news for employees: You don’t pay a large percentage of your health insurance premiums. Bad news for employers: You’ll have to shoulder much of the load – more than 80% for individuals and more than 70% for families.

Here is the breakdown for each of your health insurance plan options:

HMO: This is easily the cheapest option for both employers and employees, but it also features the least flexibility when it comes to choosing doctors, and certain coverage may be limited.

Total premiums run about $3,500 with the employer’s share costing about $3,000. Employees must pay $5 to $25 co-payments for office visits and prescription medications. They must bear the brunt of the expenses (if not all of them) if going outside the network.

Traditional insurance: While slowly fading as an option for most businesses, this original offering of health insurance plans costs about $4,000 for the year with employer’s chipping in $3,400 to $3,500 of that amount. Employees are generally responsible for high deductibles ($200 to $1,000) and co-insurance payments (20% of the first $2,000 to $10,000 of benefits.) The deductible ranges between $250 and $1,000 and then employees are responsible for a 10% to 20% co-insurance charge.

PPO: This plan costs about $3,900 with employers picking up $3,300 of the tab. It provides more flexibility at a higher cost. Also, the out-of-pocket costs can vary with deductibles and co-pays similar to HMOs but will be significantly more for co-insurance for out-of-network visits.

POS: With POS plans, expect to pay about $3,700 with employer contributes totaling close to $3,100. Co-payments are low if employees stay within the network, but they will pay more for co-insurance.

In addition to the standard health insurance costs, you have to pay health insurance brokers a percentage of the total policy value. You may also be required to pay for additional services such as life insurance, unemployment insurance, or COBRA.