Wednesday, February 07, 2007
Health insurance plan is one of the most pleasing benefits you could offer your employees. Following are the several basic options for setting up a plan:
A traditional indemnity plan or fee for service: Employees select their own medical care provider; the health insurance company either pays the provider directly or reimburses employees for the eligible covered amounts.
Managed care: The two most common types of managed care are the Health Maintenance Organization (HMO) and another one is Preferred Provider Organization (PPO). An HMO is basically a prepaid health-care plan, in this employees need to use doctors employed by or may be under contract to the HMO and hospitals, which are approved by the HMO. Under a PPO, the health insurance plan negotiates discounts with their particular physicians and specific hospitals. Employees normally choose doctors from the available approved list, and then usually pay a sum of amount per office visit (normally $10 to $25); the insurance company needs to pay the rest.
Self-insurance: When you understand all or an important portion of an existing risk, you are basically self-insuring yourself. Usually paperwork is handled by an outside company, you just need to pay the claims, and sometimes employees assist paying the premiums. The benefits also include higher control of the health plan design, an effective customized reporting procedures and great cash flow advantages.
Medical savings accounts (MSAs): Congress of late concluded with a four-year test of MSAs, especially on savings accounts coupled with high-deductible insurance policies. Accounts are now funded with employees' pretax dollars; disbursements are absolutely tax-free if used for specific approved medical expenses. Unused funds are accumulated indefinitely and earn tax-free interest.
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