Small Business Health Insurance

Small Business Health Insurance Options
By Marilyn Katz

Health insurance ranks very high on most people's list when they are seeking a job. By offering health insurance you can attract the highest quality employees to your business. Don't think you have to offer the traditional health insurance option though. Even the large companies are finding it too expensive to offer that sort of plan these days. Instead, most small businesses offer one (or more) of three different plans: HMO, PPO, and POS.

Health maintenance organizations (HMO): An HMO consists of a network of doctors and hospitals. While the least expensive, it also has the least flexibility for your employees. The basic premise is participants choose a primary care physician (PCP) and then get referrals to other specialists.

Preferred provider organizations (PPO): This is the most frequently chosen option by small businesses owners. A PPO consists of doctors and hospitals willing to offer care to members at a lower cost. It's a little more costly to you but provides far more flexibility than the HMO. Your employees select health care professionals associated with the PPO and then pay a low deductible and very low (if any) co-insurance (the amount they have to pay after the deductible is satisfied).

Point of service (POS): A POS plan offers the benefits found both in HMOs and PPOs. Your employees still need to select a Primary Care Physician and get referrals to other physicians, but you can go outside the network without a referral and get most of your expenses reimbursed. POS plans are the most expensive of the three; both for you and your employees i.e. your employees have higher deductibles and co-insurance payments.

Small-group insurance generally applies to companies with as many as 100 employees, but the majority of companies seeking this type of insurance have two to 50 employees. In this market, health insurance prices have traditionally been based on two factors:

• Estimated cost of medical services in a given geographic area
  
  
  




• Estimated utilization of services

Cost projections are about the same across the country. But projected utilization of services is where you are going to have the most variation in cost. Insurance companies base their estimation of utilization of services probability on a variety of factors' ranging from the medical history of your employees and their dependents to age and gender. If you have someone on your staff that is considered high risk the whole group (you and your employees) is going to have to pay a higher premium. In larger corporations these people's high maintenance costs are averaged out by the large number of low risk employees. For insurance companies there is safety in numbers.

Very small companies can suffer from high premiums if one employee has a serious illness because they just do not have enough people to spread the risk around. However, a group medical plan is a benefit that attracks and retains quality employees. It is a tough problem these days.

We would like to help you find the best medical plan for your family or business. Visit us to Compare Health Insurance Plans that fit your needs.

We can also help with small business group health insurance choices.

http://minibiz.us/health-insurance/small-business-health-insurance-is-group-health-the-way-to-go/

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