When deciding on a health insurance plan for your business, it’s important to remember that it is a big decision with a lot of factors that should not be taken lightly. After all, health insurance is one of the most important benefits an employee can receive, and choosing the right plan could mean attracting better workers.
Chances are you’ll decide to go with a managed health care plan, which is the most common type of health insurance plan used by businesses for their employees. There are two different managed health care plans to consider – preferred provider organizations (PPOs) and health maintenance organizations (HMOs).
PPOs vs. HMOs
PPOs are generally more expensive for employees and employers, but you get what you pay for. They have less restriction when it comes to choosing doctors, which can be a huge benefit for you and your employees. PPOs generally require a copayment with each doctor visit and require more upfront costs. Moreover, employees usually are not fully reimbursed if at all for out-of-network doctor visits.
HMOs are generally less expensive than PPOs, but more restrictive. With this plan, employees have to visit doctors in their network, but will be fully reimbursed for their visit (i.e. no copayment). So you can keep your costs down by going with an HMO, but you will not have as great of network coverage as if you went with a PPO.
Simply deciding between a PPO and HMO is not enough, as different carriers provide different benefits for your and your employees.
Ask your employees
Before deciding on a health insurance plan, ask your employees what their needs are and what they would prefer to have included in an insurance plan. Do they want as much coverage as possible? Are they trying to keep costs down? Have an open dialogue with all of your employees and try to come to some consensus on what the most important aspects are to look for in a plan.
Once you have an idea of what you and your employees want in the plan, call insurance agents and brokers to ask questions about the various plans. Some vital questions you should ask include –
- Is the insurance carrier licensed, accredited, reputable and financially secure?
- How often are policies renewed?
- How easy is the plan to administer to all employees?
- How quickly are claims usually processed and paid out?
- What educational and communications materials are provided for employees?
- Will the policy be underwritten as a group, as individuals or both?
These are good basic questions to start with, but you also want to check into other aspects such as affordability of coverage, scope of coverage and quality of coverage. Ask the providers but also ask other small businesses or friends you know that have different plans. More likely than not the providers themselves will tell you they have great coverage and process claims quickly, but it’s important to check with someone that has said coverage to make sure that it is true.
Once you have all of the information compiled, then sit down and take some time to process all of the information that you have taken in. Hopefully there will be one plan that sticks out above the rest for you and your small business.