The purpose of business insurance is to provide healthcare for your employees and yourself. This sounds easy enough. However, it’s not as simple as it might seem.
The United States has a complex web of insurance companies, plans and laws that affect health care. Geography can often determine a business’ willingness to offer health insurance coverage to its employees. A company’s health policy may be affected by laws in other states. A U.S. Department of Health and Human Services survey found that 67% of employees are covered by an employer-sponsored healthcare plan. It is possible to put this in perspective by saying that, if a highly-skilled worker gets three job offers, it is more likely than not that at least two will include health insurance. You don’t need a brain surgeon or a psychologist to figure out who they would like to interview.
There are four types of health insurance available:
1. Medicare and Medicaid are two types of insurance that the government supports for those over 65 years old or who have advanced renal disease. There are many companies that have employees over 65 who are looking for additional insurance coverage because of the increasing age of their workforce. Medicaid, a type of government insurance, is available to those who are very poor or disabled. Certain states have become very strict about employers who completely rely upon this type of insurance to cover low-wage workers.
2. Traditional or indemnity insurance: This traditional type of insurance is usually offered by an insurer for a fee. This allows the insured person/persons the freedom to choose their own health provider and has the cost of any medical bills borne by them covered by the insurer. This type of insurance was most commonly used about 20 years ago. This type of coverage is no longer an option unless you have a large company.
3. HMOs are Health Maintenance Organizations. An HMO is a group of hospitals, doctors and other care providers who have agreed to lower rates with their insurers in order to provide medical care. HMOs, which are plans that cover individuals with a particular type of insurance, use a primary care doctor to coordinate the care. This plan does not allow for the insured to choose from a wider range of doctors, hospitals or services than those covered by the HMO. However, the PCP may approve that the person can be referred to another specialist. The scale and management of care means that premiums for this scheme are lower.
4. Preferred Provider Organizations (or PPOs): Although they are similar in many ways, HMOs and PPOs are more restrictive. An HMO may allow you to choose from two or three hospitals, depending on the plan. A PPO will identify hospitals and doctors that are part of a specific network. A PCP will be assigned to the insured, but all care must be provided within this framework. The insured will be responsible for paying all or most of the costs if any of the care is provided outside the network. These plans offer lower premiums but also allow you to choose from a wide range of health care options. A local PPO plan can be a great option if you live in an area that has excellent health care facilities.
While most plans may have variations, the majority of them will be the same.
