A toxic mix of rising premiums and revenue shortfalls are making some of the firms who do carry small business health insurance plans consider dropping their health insurance. Dropping health insurance has been a trend for the past decade. Studies have shown that the age of a small business influences whether or not it offers and maintains health insurance.
The different states by law define who qualifies to be a small business based on the number of eligible employees. Small firms are provided protections and are more subject to rules governing levels of acceptable coverage. The eligible employees are full time non seasonal and are not contractors.
Indemnity or Managed Care?
Indemnity or managed care are the two basic types of coverage a business owners select. The selection could either type, or a hybrid plan offering features of both. Indemnity insurance offers more choice but is more expensive. Both types have their pros and cons.
What is generally considered to be health insurance is indemnity. The indemnity plan covers services of any provider the consumer uses, so long as it is medically necessary and in compliance with the policy terms. Managed care restricts choice to reduce costs.
Managed care plans may be administered by insurance companies or a health maintenance organization, or HMO, that has a special provider network. Managed care carries varying levels of restrictions. A condition of acceptance is the use of a primary care physician, or the PCP, who becomes the supervisor of the care delivered and acts as a liaison with other providers in the network, as needed. Approval by the PCP is for any extensive or non-routine medical care, or consultation with specialists. This regulation is intended to control costs.
PPO or POS Plans?
The type of managed care plans offered by health insurance providers are known as Preferred Provider Option or PPO plans. POS plans are the plans that HMOs offer. These are the two most common types of hybrid plans that have features of both types of plans. A primary care doctor does not need to approve treatments under these plans, where care from any doctor is include in the plans coverage, as long as the provider is part of the network. POS plans tend to be cheaper. The major difference is that in a PPO plan, the providers a are paid a discounted fee. In a POS plan, doctors are paid a set amount, irrespective of the actual expense.
The Less Common Health Saving Accounts and Self Funded Plans
The least common small business health insurance plans are the relatively new Health Saving Accounts and self funded plans. Health Savings Accounts, or HSAs, were created by the Bush administration in 2003 as a way to trim health costs. These policies require members to pay more of their medical expenses out of pocket to use fewer services. In such accounts that work like saving accounts, but the money is to be sent solely for medical expenses. The goal is that users will be more cost conscious if expenses are out of pocket and that increased financial responsibility makes them better consumers of health care. Employers with sufficient capital resources could elect to self fund their employee health plan. In effect, the employer becomes an insurance company, accepting the risk of coverage and pays claims using its own funds. Employers electing for this approach contract with third-party administrators to handle their health plans.
With a small business health insurance plan your company can offer medical coverage to your employees. Get free quotes for small business health care plans online from leading insurance carriers.
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