Having the right health insurance benefit for your small business is extremely important. In order to help you find the benefit that fits your needs, we'll go over seven types of health insurance plans. Five of these are traditional group health insurance policies, but we'll also introduce you to alternatives if group health is outside of your budget. Knowing these policy types will prepare you for evaluating options each year as part of your internal small business audit. 1. Preferred Provider Organization (PPO) A PPO plan is a Preferred Provider Organization group health insurance policy. With a PPO plan, employees are encouraged to use a network of preferred doctors and hospitals. These providers are contracted to provide service to plan members at a negotiated or discounted rate. Employees generally aren't required to designate a primary care physician, but will have the choice to see any doctors or specialists within the plans network. Employees have an annual deductible they'll be required to meet before the insurance company begins covering their medical bills. They may also have a copayment for certain services or a co-insurance where they're responsible for a percentage of the total charges of their medical expenses. With a PPO, services rendered outside of the network may result in a higher out-of-pocket cost. A PPO may be a good option for your small business if your employees:
2. Health Maintenance Organization (HMO) Health Insurance Plans An HMO is a Health Maintenance Organization group health insurance policy. With an HMO plan, employees generally have a lower out-of-pocket expense but also have less flexibility in the choice of physicians or hospitals than other plans. An HMO may require employees to choose a primary care physician (PCP). To see a specialist, employees will need to obtain a referral from their PCP. HMOs generally provide coverage for a broader range of preventative services than other policies. Employees may or may not be required to pay a deductible before their coverage starts, and will usually have a copayment. Most of the time, there are no claim forms to file on an HMO. The main thing you will want to keep in mind is that with most HMO plans, employees have no coverage if they go outside of their network without proper authorizations from their PCP or in cases of certain emergency situations. An HMO may be a good option for your small business if you:
3. Point of Service (POS) Health Insurance Plans A POS is a Point of Service group health insurance policy. POS plans combine features of an HMO and a PPO plan. Just like an HMO, POS plans may require employees to choose a Primary Care Physician (PCP) from the plan's network providers. Generally, services rendered by the PCP aren't subject to the policy's deductible. If employees utilize covered services that are rendered or referred by their PCP, they may receive the higher level of coverage. If they utilize services by a non-network provider, they may be subject to a deductible and lower level of coverage. They may also have to pay up-front and submit a claim for reimbursement. A POS may be a good option for your small business if your employees:
4. Exclusive Provider Organization (EPOs) Health Insurance Plans An EPO is an Exclusive Provider Organization group health insurance policy. EPO plans are similar to HMO plans because they have a network of physicians their members are required to use except in the case of emergency. Employee members will have a Primary Care Physician (PCP) who will provide referrals to in-network specialists. EPO members are responsible for small co-payments and may require a deductible. An EPO may be a good option for your small business if you:
5. Indemnity Health Insurance Plans Indemnity health plans are known as fee-for-service plans because of pre-determined amounts or percentages of costs paid to the member for covered services. The member may be responsible for deductibles and co-insurance amounts. In most cases, the member will pay first out of pocket and then file a claim to be reimbursed for the covered amount. An indemnity plan may be a good option for your business if you:
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January 2020
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