Group Health Insurance
Options for Group Health Insurance
The options available to businesses are essentially the same as those existing for individuals with the exception of partially or fully self funded plans. Both traditional (Fee for Service which is rarely seen in this day and age) and “managed care” plans (PPOs and HMOs) are available as well as some form of self funding. It’s always up to the employer to choose which plan or plans to offer his or her employees.
You can also offer more comprehensive coverage by adding on benefits, including Dental, Vision, Life Long or Short Term Disability or Long Term Care Insurance, to suit your company’s needs.
Preferred Provider Organization (PPO)
Preferred Provider Organizations (PPO) plan are a great choice for someone who prefers a certain amount of freedom in choosing their healthcare providers, but also wants to keep their insurance costs fairly low. These plans are less restrictive than HMO plans; however, they usually require you to pay a slightly higher out-of-pocket amount.
You choose your doctor or healthcare providers (hospitals, specialists, etc). The plan encourages you to choose a doctor from within its network of providers, but will cover a portion of the costs if you choose to see a doctor outside the network. Insurance companies are working to keep the costs in a PPO environment down by offering Network choices. Meaning a larger network will be more expensive than a smaller network. Depending on the insurance carrier the size in the networks can be dramatic or very little.
The carrier negotiates separate contracts with the providers in these networks and will decrease the size of the network based upon who will except the contract as well as cutting out those hospitals or providers that are more expensive. If your hospital or provider is in the smaller network, this can be a great way to save anywhere from 5 to 12 percent on your health care premiums.
With most insurance carriers you can offer a PPO and an HMO option. Or if an HMO option is not available you can choose two PPO options with some restrictions. This is a great way to keep costs down and still offer great benefit options.
Preferred Provider Organization (PPO) Product Features
PPO plans are a “managed care” option. They have a network of doctors and other healthcare professionals that are covered under the plan. As a member of a PPO, you are encouraged to use the physicians that are part of this network.
Unlike the HMO plans, however, PPO policies will still cover a portion of your costs if you choose to go outside of the network. Seeing an in-network doctor for a routine visit, your co-payment might be around $20 or $35, or you may have a deductible. If you visit a non-network doctor for the same routine visit, you might pay as much as 50 percent of the bill.
If a person prefers to have the freedom to choose their own specialist, without having to seek a referral from your primary care doctor, then a PPO plan may suit them best. This is an important difference from the HMO option, which requires you to have a designated doctor to serve as a “gatekeeper” for any specialty care.
Health Maintenance Organization (HMO) Plans
A Health Maintenance Organization (HMO) is usually the least expensive option, and provides the most services. They are less expensive for two reasons: There are no benefits if you go outside the network and the negotiated rate with the physicians and hospitals in more restrictive than in a PPO. Most services are paid for with a single, relatively inexpensive co-payment. Costs vary, but range usually between $20-$40 per service. Typically to lower the cost even more a hospital copay ranging from $250 to $750 per day for a certain period of time can also be added.
In exchange for a lower cost, members of an HMO plan agree to maintain a single chosen physician for services called a Primary Care Physician (PCP). An enrollee does not have the freedom to go to a doctor other than the PCP they choose from the plan (a few exceptions do exists such as a women’s choice of an OB/GYN). HMO’s are still limited in their selection of doctors, and it is never safe to assume that a doctor you currently use accepts HMO unless you ask.
The biggest benefit of an HMO is the low cost. Premiums are usually relatively inexpensive and co-payments can also be less than a PPO. Coverage is broad and focuses on general visits and preventive services. The goal is to keep you healthy so that there won’t be large costs on either side.
A Health Maintenance Organization is the best choice if you are looking for a low cost alternative that you can offer your employees.