Deciding on a health care plan for your company isn’t something that should be done lightly. Especially since, aside from paid vacation, health care coverage is the most important benefit for employees.
Managed care plans usually cover a wide range of health services such as preventive care and immunizations for adults and children, general checkups, diagnosis and treatment of illness (including any necessary tests, doctors’ visits, prescription medications, and hospital care) and complete prenatal and newborn care. In addition, some managed care plans offer some services for the diagnosis and treatment of mental health conditions and substance abuse problems.
Due to the rising costs of healthcare, small business owners are likely to choose from one of two types of managed care plans for their employees. These two types of managed health care plans are—health maintenance organizations (HMOs) and preferred provider organizations (PPOs).
Usually, an HMO is the most affordable type of managed health care plan for employers and employees. An HMO will provide full reimbursement for most health care services, as long as employees visit approved, in-network doctors and hospitals for their medical needs. Employers who elect an HMO will have to choose a primary care physician (PCP). Health care providers within the HMO network are then encouraged to limit their fees in exchange for a guaranteed number of patients.
PPOs, on the other hand, are less restrictive in terms of choosing a doctor, but they are usually more costly for employees and employers. PPOs will generally cover network doctor visits with some type of copayment. With a PPO, employees are generally required to pay more costs upfront and are not fully reimbursed when they visit doctors and hospitals out of the network. PPOs control costs by balancing employees’ freedom of choice against their out-of-pocket expenses.
When reviewing these managed care options for employees, you should consider the following questions:
Are the providers located conveniently for employees?
What doctors, hospitals and other providers are part of the plan?
Are there deductibles to pay before the insurance kicks in?
Does the plan require referrals for specialists?
Are there limits to how much will be covered by the plan?
How much does it cost to see a provider outside the plan?
Considering these questions before choosing a health care plan can help you give employees the type of coverage they want. Choosing the right kind of plan for your employees will allow you to attract and hold a capable work force.