Health Insurance

Employee health and medical insurance is probably the most expensive benefit and managing this cost is important for every small and large business. Health insurance is also considered the most valuable benefit by majority of employees. So it is important that you take the time to make the right choice.

The three most popular types of company health care plans offered to employees are HMOs, PPOs, and point of service plans (POSs). Depending on your company size, you may offer one or more of these plan to your employees.

What are the different types of medical insurance plans?
Following are the most common types of employee sponsored health and medical insurance plans available to businesses.

Conventional health insurance, also called indemnity coverage, is probably the most flexible plan but also the most expensive. Employees can visit any doctor or hospital for any treatment, without a referral and insurance company does not dictate whether the visit is necessary or not. Monthly premiums, co-insurance, out of pocket costs and deductibles make this health plan very expensive for the employer as well as the employees. Not many employers offer this plan anymore.

Health Maintenance Organizations (HMOs) plan is the least flexible and also the most inexpensive health plan for employers as well as employees. Health and Medical Insurance companies control costs by requiring patients to visit an in-network physician that provides primary care. Any visit to a specialist has to be approved by the physician and the health insurance company. The specialist or the hospital too has to be a member of the HMO network. Some employees do not like this health plan since they are not allowed to pick specialists of their choice and may also have to change even their current primary physician if she is not part of the HMO network.

Preferred provider organization (PPO) is one of the more popular health plans nowadays. Like an HMO, a PPO plan includes a collection of doctors and hospitals that have agreed to provide service at low negotiated rates. Patients are free to visit health care providers that are not part of the PPO network but they pay a higher deductible and co-insurance than they would if they visit a provider affiliated with the PPO. PPOs help limit the health care costs like the HMOs but keep the flexibility that is much desired by the patients.

Point of Service (POS) is a combination of both HMOs and PPOs. Members choose a primary care physician who provides referrals when needed. But members can choose to visit out of network specialists even without a referral and expenses are partially covered by the insurance. This too is an expensive plan much like the conventional health care plan. Premiums, deductibles and coinsurance are much like the conventional health care plan.

Consumer Driven Health Care (CDHC) plan is a very new offering by a few large companies in the US. It is like a self administered health care plan. CDHC is based on the premise that health care costs can be controlled if the consumer is directly involved in making health care decisions.

One of the common CDHC plan is a high deductible insurance plan that is paired with a health savings account (HSA). Employees and the employer make pre-tax contributions to an HSA. Withdrawals from the account are used to pay for routine consultations and preventive care. The insurance only provides coverage for catastrophic or high cost medical care. Any money left over in the HSA at the end of the year is not lost but is rolled over to cover health care expenses in the new year. Disadvantages of a CDHC is that you will have to provide tool and assistance to employees to help understand the health care options and make the right decision.

Do I have to use a broker to get health insurance coverage for my employees?
You can get medical insurance coverage for your employees by approaching a state licensed health insurance broker or by directly speak with a health insurance company. The advantage of buying coverage through a health insurance broker is that she can set you up for multiple benefits like health, dental, vision and life insurance plans. It would save you calls or trips to several providers. Some medical insurance brokers will also help your employees file claims and solve any problems they face with their health and medical insurance provider. Brokers are paid by the insurance companies. You only pay for additional services like COBRA administration.

Before you pick a health insurance broker, interview them and look for the following attributes:

• Experience working with firms of size similar to yours.
• Ability to provide multiple choices including various insurance companies and types of plans.
• Ability to help your employees resolve any issues they face regarding the insurance coverage.
• Have good references, and past and present clients that are happy with their service.

How do I evaluate different health care plans?

There are several areas to look at before you decide on the health care plans for your employees.

• Maximum allowable benefits should be at least $1 million dollars.
• The reimbursement level for a procedure should be at least what the doctor charges for it. Some companies may set very low reimbursement limits.
• Some companies offer health insurance policies with very high deductibles. If you pick a plan like that, make sure your employees also have an alternate low deductible plan.
• Compare health insurance plans for coverage of commonly used services like routine exams, lab work, physician visits, maternity care, prescription drugs and uncommonly used services like ambulance, substance abuse rehabilitation and mental health care.
• Make sure the health insurance plan provides coverage for long term care and pre-existing conditions.
• It is important that the doctors provided by the health network are accepting new patients. Also ask for physician turnover. This will tell you how satisfied the doctors are with the health insurance plan.
• Avoid hospital indemnity policies that just pay for each day of stay in the hospital and dread disease policies that pay only if you contract a particular disease. These policies are much too expensive for the coverage they provide.
• Call up the state department of insurance and ask if there have been complaints against the health insurer. Avoids insurers with unusually high number of complaints against them.

How much does it cost to get employee health insurance?
Insurance costs rise every year. The only way to get a good rate is to solicit multiple quotes. Compare health insurance from multiple companies before selecting the right supplier for your family's needs. Employers pick up most of the cost of health insurance - from 60% to 85% of the total, so negotiate hard.