Group Health Insurance
Benefits help to draw and hold key employees. Health insurance is regulated by the states but all Federal laws and mandates must be followed. Insurers cannot deny coverage to small businesses meeting qualified group status, regardless of the health of their employees or dependents. Large business are also subject to the Employees Retirement Income Security Act of 1974 (ERISA).
Types of Health Coverage
Major medical plans typically cover a comprehensive array of healthcare needs, including doctor visits, prescription drugs and hospital care. These benefits can be delivered in several different ways or plan types, as follows:
Indemnity plans (Fee-for-Service or Network plans) - These major medical plans typically have a deductible, the amount you pay before the insurance company begins paying benefits. After your covered expenses exceed the deductible amount, benefits usually are paid as a percentage of actual expenses, often 80 percent. These plans usually provide the most flexibility in choosing where to receive care.
Preferred Provider Organization (PPO) plans - These are major medical plans that the insurance company enters into contracts with selected hospitals and doctors to furnish services at a discounted rate. You are not required to select a PCP (primary care provider). As a member of a PPO, you may seek care for covered services, from a doctor or hospital that is not a preferred provider, but typically at a lower benefit level and to a maximum payment of the PPO fee schedule. This means you may have to pay the balance if the provider charges more than the plan would pay a PPO provider.
Health Maintenance Organization (HMO) plans - These major medical plans usually require the insured choose a primary care physician (PCP) from a list of network providers. Your PCP is responsible for managing all of your healthcare. If you need care from any network provider other than your PCP, your PCP will refer you to that provider. Typically there are no benefits paid for services sought from a provider outside of the HMO list of providers except in cases of emergency.
Point of Service (POS) plans - These major medical plans are, in essence, HMO plans (see HMO) but with an option to seek covered care out of network without a referral, although benefits will be paid at a lower benefit level. Plans are more flexible than HMO plans, and may or may not require you to select a PCP (primary care provider). The participating providers generally are the same network of providers available through the HMO plan of the insurance company.
Due to the high cost of health care today and double digit health insurance premium increases, the following types of plans have gained in popularity with employers seeking to control cost:
Health Savings Accounts (HSA)
Health Reimbursement Accounts (HRA)
Flexible Spending Arrangement (FSA)
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