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What type of Health Plan should I choose for my Small Business?
Home » Small Business » Small Business Health Plan » What type of Health Plan should I choose for my Small Business?In order to select the health plan that is the perfect fit for your small business, you need to know your options. There are several different types of health insurance plans, each of which can be customized to meet the needs of your small business:
HMO: An HMO (health management organization) is based on contracts between health insurance providers and medical professionals. If your small business uses an HMO, employees will pay lower premiums (this is the advantage of HMOs), but they will be required to see certain doctors and go to certain hospitals. The criticism of HMOs is that it takes away the freedom of choosing your own health providers, and it does not motivate doctors and hospitals to provide the best care possible.
PPO: A PPO (preferred provider organization) plan is a step up from HMOs in terms of costs and in terms of freedom. Employees will receive a discount if they visit certain physicians, but their coverage will extend to all regular medical care, regardless of who provides the care.
Major medical: Major medical health insurance is usually the best choice for relatively healthy and low wage employees. The premiums are low while the deductibles are comparatively high. In comprehensive coverage, all basic needs can be met, while with supplemental coverage, your insurance only kicks in after everything else will be met. Employees who only receive medical care in the event of an emergency might opt for this coverage.
Consumer-driven plans/health savings accounts: This is a relatively young development in the health plan field. Employees maintain a savings account that is paired with a high deductible insurance plan. The savings account (which is tax-free) covers all minor expenses, and the high deductible plan provides a safety net. These plans often also offer incentives to individuals who make healthy lifestyle choices.
In addition to choosing between each of these types of coverage, you will also want to consider whether you will offer dental or vision care, which is usually separate from basic health insurance. In any case, do your research. Talk to other companies, get quotes from several companies online, and be careful to avoid scams.
Your best source of information may be your employees. Whether you are starting or modifying a small business health plan, ask your employees what kind of coverage they would prefer or what health benefits are important to them. Some health insurance providers will offer several different types of coverage, even to individuals within the same company. Your goal should be to get the best of both worlds—an affordable health plan that also provides adequate coverage in ways that your employees prefer.
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