Decisions, Decisions... Choosing a Medical Insurance Plan For Your Employees
Whether you are a small company or a large one, you will want to make sure that you are getting your money's worth out of the health insurance plan(s) you choose to offer as an employee benefit.

First, find out if your company belongs to a Trade Association or local Chamber of Commerce . Often membership in these organizations will provide you with a variety of medical insurance plan options at attractive group rates.

Next, find out what plans are available and try to match one or two that will fit your company needs. Health Insurance programs can generally be broken down into two broad categories: TRADITIONAL and MANAGED CARE. Within those categories, there are four basic types of plans from which to choose.

Traditional Health Insurance is also known as "fee-for-service" or "traditional indemnity". These plans require you to pay a certain amount of your medical expenses up front - in the form of a deductible - and afterward the insurance company pays the majority of the bill.

1. For many years, "fee-for-service" or "traditional indemnity" insurance coverage was the only insurance plan available. Under this plan, you have complete autonomy to choose doctors, hospitals and other health care providers. You can refer yourself to any specialist without getting permission. Under these plans, insurers will usually only pay for "reasonable and customary" medical expenses, taking into account what other practitioners in the area charge for similar services. If your doctor or provider happens to charge more than what the insurance company considers "reasonable and customary", you will most likely have to make up the difference yourself.

   Fee-for-service plans often include a ceiling for out-of-pocket expenses, after which the insurance company will pay 100% of any costs. Needless to say, that ceiling is usually very high.

   Fee-for-service insurance plans offers flexibility in exchange for higher out-of-pocket expenses, more paperwork and higher premiums.

   Managed Care has really taken off in the past ten years. Today, you will see three basic types of managed care plans available. The majority of health insurance subscribers today are enrolled in some type of managed care program. All managed care plans involve an arrangement between the insurer and a selected network of health care providers. They offer policyholders significant financial incentives to use the providers in that network.

2. Preferred Provider Organizations (PPOs) PPO's have made arrangement for lower fees with a network of health care providers. Policyholders are given incentives to stay within the network. For example, a visit to an in-network provider might mean you'd have a $5 co-pay. If you decided to see an out-of-network provider, you'd have to pay the entire bill up front and then submit the bill to your insurance company for an 80% reimbursement. Also, you might have to pay a deductible if you choose to go outside the network, or possibly pay the difference between what the in-network and out-of-network doctors charge.

   When enrolled in a PPO, you can refer yourself to a specialist without Getting approval and, as long as you've chosen an in-network provider, enjoy the same co-pay. Choosing providers within the network means less money coming out of your pocket and less paperwork.

3. Point of Service (POS) Point-of Service plans are similar to PPOs, but they introduce the gatekeeper aka the Primary Care Physician(PCP). You will need to choose your PCP from the plan's network of doctors. As with a PPO, you can choose to go out of network and still get some kind of coverage. In order to get a referral to a specialist, though, you usually must go through your PCP. You can still choose to refer yourself, but it will mean more money coming out of your pocket. Usually, you will have to pay a deductible and will receive a reduced reimbursement.

4. Health Maintenance Organizations (HMOs) These plans usually offer the lowest premiums but are the least flexible type of health plan. In exchange for a low-co-payment, low premiums and minimal paperwork, an HMO requires that you only see it's providers, and that you get a referral from your primary care physician before you see a specialist. Most HMO's require that you get clearance from your primary care physician before you can visit the emergency room. In general, you must see HMO-approved physicians or pay the entire cost of the visit yourself.

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