How to choose a Group Health Plan

The process of choosing a group health plan for you and your employees can be arduous and confusing. There are many decisions that need to be made, as well as a certain amount of research done to help you make a decision. Ultimately, this decision must both support you and your employees’ families and fit your company’s budget.

One important aspect of this decision involves determining the proper delivery system for your benefits. There have been many changes in the delivery of health care in the last ten years. Most of these changes stem from the insurers’ increased involvement in managing claims, as well as the growing power of hospitals and medical groups in negotiating contracts. This managed care has created different methods for the distribution of services and the financing of claims. The three main types are HMO, PPO, and POS.

HMO

HMO plans generally have the lowest out-of-pocket costs for employees with the least amount of freedom to choose doctors. Usually, members see a Primary Care Physician, whom they can choose from a specific network of doctors. Members usually must be referred to a specialist, if necessary. The larger the network, the more likely their present doctor will participate.  While HMO plans traditionally have been the least expensive option, costs in relation to comparable PPO plans have changed over the last few years.

POS (Point of Service)

POS plans combine the low out-of-pocket costs of an HMO with the freedom of a PPO. A POS has an HMO tier, which allows members to go through a Primary Care Physician for the lowest out-of-pocket cost, and has a non-HMO option for freedom of choice. These plans offer either two-tier or three-tier benefits for flexibility to your employees. These plans are typically the most expensive plans for employers and are not offered by every carrier.

PPO (Preferred Provider Organization)

PPO plans provide more freedom while still controlling costs. These plans generally are comparable in cost to HMO plans, although pricing has been shifting over the last few years. Members choose from doctors within a network in order to keep costs down, or they can see a doctor outside of the network with higher out-of-pocket costs.  Members are usually responsible for a percentage of the cost of covered services, both in and out-of-network.

Decision One: Choose a benefit level

Choose a comfortable level of benefits by comparing deductibles, co-payments and plan costs. The higher the deductible and co-payment you choose, the lower the premium.

Decision Two: Check the network.

It is important to check the network of doctors and hospitals in your local geographical area.

Decision Three: Determine the rates

Rates play an important role in the decision. There can be significant in the cost of similar plans from carrier to carrier. Identifying other carrier strengths will help ensure the appropriate decision for you.

Decision Four: Offer additional plans or benefits

This is an opportunity to look at all types of plans, not just medical. You may be able to offer your employees benefits such as dental, vision or life. Mix and match plans within certain carriers to give you and your employees more flexibility in choosing plans.