If your business employs 50 or more people, then due to the Affordable Care Act, you are required by law to provide each one with health insurance. If there are fewer than 50 people working for you, the choice is yours as to whether to provide health coverage and if so, the type of medical care you are willing to provide. There are three basic options to choose from HMOs, PPOs, and fee-for-service health plans.
HMOs – Health Maintenance Organizations
Health maintenance organizations, or HMOs, are the most widely used form of health care being offered by employers today. HMOs, like Industrial Health Medical Group, are popular for the breadth of coverage they provide and their lower costs in comparison to traditional fee-for-service healthcare plans. With HMOs, the insurance companies contract with hospitals and physicians, including general practitioners and specialists, to provide care for the insured.
PPOs – Preferred Provider Organizations
Much like HMOs, preferred provider organizations, or PPOs, offer employees “preferred provider” networks of general practitioners and specialists they can go to under their healthcare plans. Unlike HMOs, however, insured employees do not have to go to in-network doctors. Referrals from primary care physicians are also not needed to schedule appointments with specialists. Some employees prefer this added freedom of choice, but studies have shown that history tells us most would rather pay less for fewer options.
An Indemnity or Fee-for-Service Health Plans
Indemnity health plans, also known as fee-for-service plans, are prehistoric fixtures of the health insurance world. With these traditional insurance plans, employees have the freedom of choosing their medical facilities, physicians, and services. In return for this freedom, insurance companies require employees to pay an annual deductible and will only begin paying coinsurance after the deductible has been met. Typically, coinsurance for indemnity plans runs 80/20 or 70/30, and the insurance company is responsible for paying the higher of the two rates.
Whether or not your business employs 50 or more people and is required to provide health insurance, medical care coverage is a must for any employer competing for talent in today’s ultra-competitive business space. When it comes to providing your employees with medical care, you have three basic options to choose from. Deciding on the right option will depend on your industry, the size of your business, your budget, and perhaps most importantly, the needs of your employees.
Kara Masterson is a freelance writer from Utah. She graduated from the University of Utah and enjoys writing and spending time with her dog, Max.