Different Types of Group Health Insurance Plans:

When you begin to select your group health insurance policy for your employees, it is important to understand the different types of insurance options that will be available. There are three main types of insurance policies that are currently available, and there are specific things to consider with each one.

HMO

An HMO plan is typically the least expensive health insurance plan. It will normally feature a very low deductible, if any, and the monthly premiums are generally low. Co-payments of $15 to $30 are normally required for doctor visits or prescription purchases.

Although an HMO is cheaper for your employees, the level of care that they need may not be present. An HMO requires the selection of an in-network primary care physician. This means that your employees may need to find a new physician if they want their doctor visits to be covered by their insurance policy. This can be difficult especially for employees that are used to seeing the same physician. An HMO also requires referrals for specialist care and can make it difficult for employees to access specific types of care.

Even though there are serious downsides to an HMO, it may be the only type of plan that your employees can afford. This type of plan will not be HSA eligible, and it is important for you to educate your employees about this fact. HSA’s or health savings accounts, can offer your employees significant savings on their health care needs by allowing them to pay for their medical care, insurance premiums and other needs out of a tax-free fund.

PPO

A PPO plan has a higher annual deductible than an HMO, and monthly premiums may be higher than HMO plans. However, your employees will have more health care options with this type of insurance plan. PPO’s allow employees to select the physician of their choice and are not as stringent when it comes to visiting a specialist.

Since a PPO plan does have a higher deductible, this means that it should be HSA eligible, so long as the deductible is greater than $1000 annually. Since HSA’s are becoming more popular, particularly with employees, this is an important point to consider.

If your employees are concerned that they will not be able to afford a PPO type plan, you may need to illustrate the savings that they can experience by using their health savings account to pay for their premiums. In most cases, they will end up paying less money for a PPO type plan then they would using an HMO insurance policy.

POS

A POS plan is a hybrid between an HMO and a PPO plan. This type of plan offers the lower costs of an HMO, with the greater freedom of care of a PPO plan. Deductibles for this type of insurance policy are generally in-between what you would expect to pay for an HMO and a PPO plan.

This may be the best option, particularly if your employees are cost-conscious, but still want the benefits of a PPO plan. If the deductible is higher than $1000 annually, they will be able to enjoy the best of both worlds by having a lower-cost, HSA eligible health insurance plan.

If you are not certain of the type of plan your employees would prefer, or if you have several dissenting opinions, you may want to purchase a flexible group health plan. This type of plan allows your employees to select the level of coverage they need and the kind of coverage they can afford. For example, if you have five employees that would prefer a PPO type plan and six that would rather have an HMO plan, a flexible plan would offer each employee what they are looking for.


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