Talking the talk: before you contact an insurance broker, you need to speak the language.
The best way to start is to find out what types of health plans are available in your area and to focus on those plans that meet your employees' priorities.
Here is a summary of three basic types of health insurance:
Indemnity or Fee-for-Service: This plan lets the policy owner choose any doctor or hospital they want. There is usually a deductible amount that must be paid before the insurance company will pay benefits. Once the deductible had been met, the policyholder and insurance company share the cost on a percentage basis. This is commonly referred to as the co-pay and is typically divided so the insurance company pays 80 percent of the cost and the policyholder pays the remaining 20 percent. Indemnity plans usually require that you submit a claim form to be reimbursed for expenses. Usually the higher the deductible, the lower the monthly premium cost.
Health Maintenance Organization (HMO): An HMO provides comprehensive medical care (inclusive of doctors visits, hospitalization, emergency care, lab tests, surgery) as well as preventative care (immunizations, "well baby" checkups, mammograms). The policyholder pays a monthly premium and usually a small co-payment for office visits. The advantage of this type of plan is that medical costs are usually lower and there are now claim forms to submit. The disadvantages include a restricted choice of health-care providers and the need to coordinate most health-care visits through your primary care physician.
Preferred Provider Organization (PPO): This type of insurance plan combines elements of the traditional indemnity plan with those of an HMO. Usually, the insurance company has contracts with many doctors for discounted services. Those doctors are thereby considered "preferred providers." If the policyholder goes to one of those providers, they would typically make an office visit co-pay and the physician would file the insurance claim. Most PPOs still provide some level of coverage even if you use a doctor outside the network. Usually, there are more doctors to choose from in a PPO than an HMO.
Many insurance companies offer all three types of health plans. When considering what type is right for your company, you should consider these factors:
* How many times your employees went to the doctor?
* How much your organization can afford to pay in premiums per month?
* How much does your staff want to pay each time they visit the doctor, and how much are they willing to contribute to monthly insurance premiums?
* Is prescription drug coverage important to you?
Once these questions are answered, the next step is to contact an insurance broker who can provide you with a comparison of the policies and the costs involved. Also, people who want to continue to use their current doctor should contact that doctor's office to find out what health plans they participate in.
The final health plan, or combination of plans, you choose should satisfy how much coverage you need in exchange for the amount of premiums that you can afford.
Health insurance: Facts & figures
Three-quarters of small businesses in the United States (small business being defined as two to 50 benefits-eligible employees) currently offer health insurance. Most companies who do offer health insurance offer one plan, with HMOs and PPOs being most common.
Almost one-half of small businesses that offer health insurance have their employees contributing to the cost of their health insurance.
* When employees do contribute to the cost of the health plan for themselves, they average paying 42 percent of the total cost.
* The majority of employees do have to pay an additional cost for adding their family to their health coverage.
* The average cost for including one's spouse is $168 per month, which increases to $249 per month when including their spouse and children.
Source: National Association of Health Underwriters
Small business decision-makers were asked their opinions about four proposed federal health initiatives for the working uninsured. All four were either strongly or mostly favored by at least seven in 10 employers.
* More than eight in 10 strongly or mostly favor offering a tax incentive through employers to help their employees pay their own portion of the cost.
* Three-fourths strongly or mostly favor offering lower-income employees a tax incentive or government subsidy to help them pay their share in the cost of health insurance regardless of the place of purchase.
* Seven in 10 strongly or mostly favor providing additional funding to encourage states to provide healthcare coverage to working adults who do not qualify for coverage through the Medicaid program but still cannot afford health insurance coverage.
* Seven in 10 also strongly or mostly favor having Medicaid cover more low-wage workers and their families who have no health-care coverage.
Source: National Association of Health Underwriters
Roy Lamphier is director of insurance programs at the Detroit Regional Chamber.
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|Title Annotation:||health insurance; Health Care|
|Article Type:||Buyers Guide|
|Date:||Nov 1, 2001|
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