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when offering medical benefits to your employees. Some of these same
plans are offered on an individual basis. Call for additional specifics
about individual plans. The following are features of the different
plans available:
Health Maintenance Organizations (HMO)
Plans contract with specific doctors, medical groups and hospitals to
provide members a defined set of comprehensive benefits, including
preventive care. As an HMO member you select a primary care doctor from
the list of doctors in the HMO’s network. Your primary care doctor will
be the first medical provider you call or see for your medical
conditions. Your primary care doctor will make any needed referrals to a
medical specialist. Some HMO plans allow self-referral to a specialist
in the network for an additional fee.
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Advantages
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Disadvantages
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Very Comprehensive Coverage |
All doctors & specialists must
be in the same IPA or Medical Group |
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Includes Preventive Care |
Referrals to specialists for
treatment must be obtained by primary care doctor first. |
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Lower premiums. |
No out of network benefits |
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Low co-payments |
Utilization review required |
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Includes Preventive Care. |
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Fewer out-of-pocket expenses |
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No deductibles on most plans |
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No claim forms |
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Preferred Provider Organizations (PPO)
Plans consist of
doctors, hospitals and other health care providers that have agreed to
provide patient care at a reduced fee. Members may select any doctor or
hospital in the network including specialists. Members may opt to go
outside the network, however, their out of pocket cost may be
substantially higher.
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Advantages |
Disadvantages
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| Freedom to
choose any provider within the network. |
Most PPO’s
have deductibles |
| No waiting
for a referral to see a specialist. |
Your
coinsurance amounts will be higher than those of an HMO |
| You make your
own decisions about your health care rather than going
through a gatekeeper. |
Out of
Network benefits are paid at a lower percentage |
| PPO providers
cannot charge you more than the contracted rate. |
Certain
procedures and hospital admissions still require
pre-authorization |
| No claim
forms |
Waiting
periods may be required for some services because of
pre-existing conditions |
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Point of Service Plans (POS)
Offer the member the choice
of selecting an HMO type plan with its broad coverage and cost control
or the services of a PPO network and/or out of network providers. POS
plans let the member decide how much they are willing to pay for a
particular service and let them decide which way to access care.
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Advantages
|
Disadvantages
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| Very
Comprehensive coverage |
Deductibles
and copayments apply |
| No deductible
with HMO selection. |
There are 2
or 3 different out-of-pocket maximums to be satisfied. |
| Low
copayments with HMO selection |
Out of
Network benefits are paid at a lower percentage. |
| Preventive
care included. |
Certain
services are covered by accessing care in the HMO only. |
| Freedom of
choice to access care in the HMO, PPO or out of network. |
Waiting
periods may be required for some services because of
pre-existing conditions. |
| No claim
forms |
|
Pre-paid (DHMO) Plans contract with specific
dentists to provide members a defined set of comprehensive benefits. You
select a dentist from their list of providers at the time of enrollment
and you must see that provider for benefits. Typically, there are not
waiting periods to satisfy before you can receive services and, there
are no deductibles to satisfy. You pay only the copays associated with
the services you receive. There are no annual maximums.
PPO plans consist of dentists that have
agreed to provide patient care at a reduced fee. Members may select any
dentist in the network including specialists. Members may opt to go
outside their network, however, their out-of-pocket cost may be
substantially higher. There are deductibles, waiting periods and annual
maximums associated with these types of plans.
Vision care is an
important preventive benefit for your employees at a very low cost to
you. Most plans have a network of doctors that they contract with to
provide you with the maximum benefits. On the average, coverage includes
a complete eye examination once a year, lenses once in a two year period
and frames once a year. Contact lenses are covered both for medically
necessary and cosmetic situations. Laser Vision correction is also
available for a discounted rate.
Voluntary benefits coverage is the fastest
growing segment of the employee benefits market. These programs are
offered on a completely voluntary basis at no cost to the employer.
There are little or no minimum employee participation requirements.
These popular policies belong to the individual and are completely
portable.
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Dental |
Vision |
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Life Insurance |
Disability Insurance |
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Accident Expense |
Cancer Policies |
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Long Term Care |
Hospital Indemnity Plans |
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IIRS Sections 125
IRS Code Section 125 allows your employees
to pay their share of the company’s group health plan with “before tax
dollars” (medical, dental, vision, voluntary benefits, etc.) Under
Section 125, employee contributions are not considered Gross Income and
are therefore not subject to employment taxes (Social Security,
Medicare, FICA, FUTA); State or Federal employee withholding; or,
workers’ compensation insurance premium calculation
This tax-advantaged plan allows employees to
use pre-tax dollars to pay for certain benefit costs. Pre-tax dollars
can be used to pay for:
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Medical Premiums |
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Deductibles & Copayments |
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Vision care; exams, contact lenses, solutions and eye
glasses |
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Day care for dependent children and incapacitated spouse,
or other tax dependent. |
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Medical care such as physical exams, prescription drugs,
health related supplies and services |
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Dental care such as checkups, cleanings, orthodontics. |
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Hearing care; exams, hearing aids, batteries |
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Unexpected events, as well as the aging
process, can leave you in a vulnerable position both personally and
financially. What is Long Term Care? It’s the type of care received
either at home or in a facility, when someone needs assistance with
activities of daily living (bathing, dressing, toileting, transferring,
continence or eating) or suffers severe cognitive impairment. This type
of policy can be offered as an employer sponsored plan or a voluntary
plan. Coverage is guarantee issue with no medical underwriting to
specified policy terms and maximums.
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Frequently asked questions for Group Health
Insurance:
1)
What is the minimum number of employees required to qualify as a
group?
You must have a minimum of 2 employees or
owners to qualify for a group health plan. These 2 people may be A)
Employer and Employee, B) Two Partners, or C) Two officers of a
Corporation.
2)
What must the employer contribute toward the employees health
plan?
In most cases, the minimum employer
contribution must be at least 50% of the employee only premium. The
employer is not required to contribute to the premium for dependents.
3)
What percentage of employees must enroll under the group health
plan?
Generally, 75% of all eligible employees
must enroll under the group plan. (exceptions are made in certain
situations).
4)
Which employees are considered “eligible” under the group health
plan?
An eligible employee is any employee that
works 30 or more hours per week for the company. The employer may elect
to include employees that work 20 or more hours per week. If an employee
is already covered under another group health plan, they are not
included in the 75% minimum eligibility factor. Qualifying group health
plans are “guarantee issue,” which means that no employee may be denied
coverage due to pre-existing conditions.
5)
Does my company need Workers’ Compensation insurance to qualify
for a group plan?
Yes, in most cases 100% of the eligible
employees must be covered by Workers’ Compensation insurance, except for
those people that are exempt under Federal or California Laws.
6)
Can my employees choose different types of health plans?
Yes, most companies have dual option
benefits in which they allow your employees to choose from a variety of
plans that are offered.
7)
Are there special rates or guarantees for group health plans?
The rates will vary based on the size of
your group, geographical location, age of employees, overall healthiness
of employees, as well as other factors. Many insurance companies offer a
twelve month rate guarantee on the monthly premium.
8)
What is required to verify that my business qualifies for a group
health plan?
This depends on the structure of your
business. If you have employees, you will need to provide a copy of your
most recent DE-6 (State Quarterly Wage Report). This will be used to
verify eligible employees. For partnerships or corporations, you will
need a business license, Articles of Incorporation or other documents
that can verify the legitimacy of your business and the participation of
all people to be covered under the group health plan.
9)
How quickly can I add new employees to my existing group health
plan?
This is up to you. When you enroll in a new
group health plan, you decide what length of time that a new hire must
be with your company before he or she qualifies for group benefits.
Typically, an employer sets a waiting period at 90 days, but you may opt
to choose a shorter or longer period of time.
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insurance needs.
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