Group Health Insurance Options
While all these health plans have certain advantages and disadvantages, it’s up to you to decide which makes the most sense for your needs. Here are some of the common types of group health insurance options available for small businesses.
Fully-Insured Plans
Of all the types of group health insurance, the fully-insured plan is the more traditional option. Fully-insured plans involve the insurance company taking on the risks involved with healthcare costs and charging your business an annual premium for the benefits in the insurance policy, which can be partially paid for by the employees.
The insurer uses a variety of factors used to calculate group health insurance premiums, including:
- Size and health of the group
- Average age of the group
- The employer’s claims history
Self-Funded Plans
While the insurance company covers the expense of employee health costs in a fully-insured plan, self-funding places that burden on the employer. This can often lead to more affordable rates and more control over a plan.
This path is often seen as an option for large businesses, but small groups can also take advantage of self-funded plans. Small businesses can opt for a partially self-funded plan with stop-loss insurance. This way the employer can know exactly how the insurance plan is working for the company every month.
Health Maintenance Organization (HMO)
An HMO is a group coverage setup where group members pay for specific health services through monthly premiums. Through an HMO, you’ll have access to a network of healthcare providers and locations, but services will be limited to those that fall under that network. This arrangement allows HMOs to be more affordable than other types of health insurance plans.
Preferred Provider Organization (PPO)
PPO plans are like HMO plans, except with more flexibility. PPOs feature a network of healthcare providers and facilities, but group members have the option to go to physicians or locations outside of the network, at additional cost to the employee.
Cecil Jenkins & Associates, Inc. 757-420-7777