Health Insurance for Your Business

An important first step to take when discussing potential health insurance plans is to assess your current employee group.

Are most of your employees young and healthy, or are they older with more health complications? Are most of them single, or do they have growing families with more dependents? Do they visit the doctor frequently, or do they limit their visits to no more than once or twice per year?

These are just a few of the many factors that should influence your choice of insurance plan. For example, if your employee group consists of predominantly mothers, you might consider a plan that includes maternity coverage as one of its benefits.

Your insurance plan should also be priced relative to your employees’ salaries. If an employee’s annual salary is $30,000, expensive premiums or unreasonable deductibles might very well force them out of the job

When it comes time to choose a health insurance plan, it’s easy to become overwhelmed by the different plan types that are available. After considering the needs of your employee group, however, you should be able to narrow down your options.

In most cases, you will be weighing the benefits of the two most popular plan types, health maintenance organizations (HMOs) and preferred provider organizations (PPOs).

HMO plans

 HMO plans are typically more affordable than PPOs and other plan types, but they also come with greater restrictions. With an HMO plan, an employee is required to visit an in-network health care provider in order to receive benefits.

If the employee’s current physician is out of network, he or she can choose to continue visiting that physician but will need to pay out of pocket.

PPO plans

Conversely, PPO plans are more expensive, but they offer greater flexibility. With a PPO plan, an employee can visit a physician who is either in or out of network and still receive insurance benefits. This doesn’t, however, guarantee that the insurance company will pay the same amount whether in or out of network.

You will need to think about your employees’ priorities when deciding on a plan type. Would your employees rather have the low monthly premiums of an HMO plan or the increased flexibility of a PPO plan?

If you want to provide your employees with great coverage while keeping costs down, you will need to address the following questions:

• How much will you contribute to your employees’ premiums? It’s common for businesses to pay 50% of an employee’s monthly premium, but contributing more might go a long way towards retaining your employee.

• Will you contribute to the premiums of your employees’ dependents? While you’re not required to contribute to these monthly premiums, affordable coverage is a priority for many families – particularly larger ones.