Due to the new health care legislation, many small businesses are gearing up to offer their employees a health insurance package. However, most of these businesses are unaware of the different policies available and what the cost will be to the business to provide this type of coverage.
Catastrophic Health Coverage
This type of policy is very low cost to both employee and employer. This type of policy offers a very high deductible and provides limited coverage for every-day type of medical treatments. This type of policy is most effective for emergencies. There is low cost to maintain and is geared toward people that are under the age of 30.
Heath Maintenance Organization (HMO)
A HMO policy will provide better coverage to the employee and, on average, carries a much lower deductible. Employees will be able to make office visits, fill prescriptions and receive medical care at a discounted price when using doctors within the network. Coverage also applies to doctors outside of the network, but will cost the employee more out-of-pocket. Employers face paying 60-80% of the premium costs for this type of policy. Insurance laws are created in each state, so requirements will vary depending on the residence of the company. The state insurance commission, or similar entity in your state, will be able to provide you with the requirements you need to meet.
Preferred Physician Organization (PPO)
A PPO is the “gold standard” of insurance programs. This type of organization allows employees to visit any type of doctor within the network without the need for a referral or establishment of a primary care physician. Doctors that are out of the network will cost more to visit, but are still covered under the plan. This type of plan generally has low co-pays and deductibles. Employers will need to pay a percentage of this plan also, according to their state mandates.