Other Free Encyclopedias » Online Encyclopedia » Encyclopedia - Featured Articles » Featured Articles: Blanco Kitchen Sink - Blanco Kitchen Sinks: More Than 80 Years of Quality and Innovation to Cherry Hill Inn - Find a Cherry Hill Inn and Get Close to Philadelphia

Business Health Plan - Purchasing a Business Health Plan

types of business health insurance cost containment

Large and medium size employers generally offer health insurance plans to employees as part of a total benefits package. While it used to be that the employer would cover the total cost of providing health insurance coverage, those days no longer exist. Most group insurance plans have some level of employee contribution required for health insurance coverage.

Some small businesses will provide business health plan options for employees, but many do not. A small business may cover a portion of the monthly premiums, and some have health insurance plans available but the employee must pay the total premium amount if they want to select the coverage.

Business health plan insurance can be a complicated industry. There are a variety of insurance options available at a variety of prices. Figuring out which business insurance plan is best for the employer and employee requires research and, often, assistance.

Types of Business Health Insurance

There are many options available for the business that wants to offer health plans to employees. The decision starts with the type of business health insurance available.

•Traditional Indemnity Plans – these fee-for-service plans provide coverage for medical expenses from doctor’s visits to hospital stays. Everything in between is covered, including laboratory testing, x-rays, urgent care facilities, emergency room visits, surgery expenses, and ambulance transport. Traditional insurances allow freedom of access to any doctor or hospital, but have deductibles, co-payments, and co-insurances for the individual. The financial obligation of the individual covered under a traditional business insurance plan could be substantial, depending on the level of coverage provided by the insurer.

•Managed Care Plans – these include health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Managed care health insurance plans for businesses have a group of doctors and hospitals employees must access for care. Medical expenses are covered at a higher level than traditional indemnity plans, but access is limited. Managed care plans have set co-payments for medical visits, and the insurer pays the remaining charges.

•Self-Insurance Plans – this type of health insurance is for businesses with a large number of employees, and the business (employer) basically assumes the risk for the provision of care. The premiums paid by the employer and employees will be used to cover medical expenses, rather than employers joining a larger risk pool of all employers covered by the insurer. The administration of the self-insured plan is handled by an outside company, and the benefits offered can be tailored to meet the specific needs of the employer. While the financial risk is higher for the employer, protection under Stop Loss Insurance can help minimize that risk. A Stop Loss Company will “re-insure” the company, or pick up any payments over a certain dollar amount.
Within these basic types of insurance, the business’ health insurance plan can be tailored different ways, from amounts of deductibles, co-insurance limits, out-of-pocket maximums, and lifetime maximums on the dollars an insurer will pay towards an individual’s healthcare. The customization of the insurance plan can minimize the amount the business expects to pay for providing health insurance for employees.

Cost Containment

Over 60 percent of all Americans receive their health insurance plan benefits through a business (employer) health insurance plan. In the past few years, the cost of providing health benefits through business health insurance has been steadily increasing. Many businesses are reducing the level of insurance provided by increasing out-of-pocket expenses on deductibles and co-insurances. Employers are also asking that employees pay a larger amount of the monthly premiums for health insurance.

Small businesses are hit hardest by the rising cost of healthcare. Some insurers will not write health plan insurance policies for a business that has employees with pre-existing conditions. Or the insurer will exclude an employee with medical problems from the group coverage. If the group has high healthcare costs the insurer may cancel the policy upon renewal, or increase premium rates to the point where the business cannot afford the health plan policy.

A business interested in obtaining health insurance may contact an insurance broker. The broker will represent several insurers that offer business health plan. They can make the search easier by understanding the business’ needs, reviewing insurance options, and making the appropriate recommendations.

Business Home Internet Marketing Opportunity - What You Should Know About Finding a Business Home Internet Marketing Opportunity [next] [back] Business Graduate Schools - Choosing the best business graduate schools

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or