| For now, most small businesses are not required to | | | | insurance rates for the past five years as well as the |
| offer health insurance, but there are insurance | | | | differences between the types of plans the agent has |
| regulations in certain states. However, offering health | | | | to offer. An agent who is unwilling to answer questions |
| care benefits will do more than keep up with | | | | should not be trusted to handle your accounts. |
| regulations; it will attract new employees and help | | | | When choosing an insurance agent and plan, ask other |
| reduce turnover. Besides, many small businesses can | | | | businesses about the experiences they have had with |
| seem like a second family to owners and employees | | | | their agents and insurance companies. It is also |
| alike. A caring business owner wants to provide for his | | | | important to discover what the employees need from |
| or her employees as well as possible without going | | | | their health insurance policies. Have a meeting and |
| bankrupt. The key to providing health insurance is | | | | allow employees to address their concerns. Take into |
| choosing the best type of policy possible. | | | | account the demographic of your employees and |
| States regulate health insurance providers, but there | | | | what their medical needs may be. |
| are federal laws protecting small businesses from | | | | Health Insurance Requirements for Small Business: |
| discrimination. A provider, for example, may not deny | | | | State governments regulate insurance plans for small |
| coverage to a small business because of a health | | | | businesses. Different states require different levels of |
| condition or illness of any employees or their | | | | coverage, so it is important to be aware of state |
| dependents. The Employees Retirement Income | | | | regulations. States also regulate premiums an insurer is |
| Security Act of 1974 (ERISA) established federal | | | | allowed to charge by determining the methods used to |
| regulations for self-insured health plans, should small | | | | calculate premiums. This may be done by with a |
| business owners choose to insure themselves. | | | | community rating or by employee characteristics such |
| However, most small businesses do not opt to | | | | as health, number of smokers, etc. There is little that a |
| self-insure. | | | | small business can do to control insurance premiums, |
| Types of Health Insurance Plans for Small Businesses: | | | | but there are some choices that employers do have |
| The National Association of Insurance Commissioners | | | | to reduce costs. |
| (NAIC) has compiled information on different types of | | | | The type of plan a small business uses is the best |
| insurance plans to help small business owners choose | | | | way to control costs. For example, HMOs are usually |
| the best plans for their employees. Major medical plans | | | | cheaper than other major healthcare insurance plans. |
| include Indemnity plans, Health Maintenance | | | | PPO insurance plans are more expensive than HMOs, |
| Organization (HMO) plans, Preferred Provider | | | | but they are less expensive than Indemnity plans. |
| Organization (PPO) plans, and Point of Service (POS) | | | | Employers also have control over certain aspects of |
| plans. | | | | insurance policies like deductibles, copayments, lifetime |
| Indemnity plans are major medical plans that allow | | | | medical coverage, maximum out-of-pocket limit, and |
| patients more freedom to choose their physicians than | | | | other health coverage that may have an impact on |
| some others. This plan usually has a deductable the | | | | premiums. |
| insured is responsible for paying before the insurance | | | | Deductibles are the best way for employers to lower |
| company begins making payments. Once the | | | | insurance premiums. Normally deductibles range from |
| deductible is paid the insurance covers a | | | | $50 to $250. However, there are some larger |
| predetermined percentage of the medical expenses, | | | | deductibles available such as $1000. These are used |
| typically 80 percent. | | | | for "catastrophic coverage", but the higher a deductible |
| HMO insurance plans do not offer the same flexibility | | | | is the lower the insurance premium will be. The same is |
| that Indemnity plans do. HMOs require the insured to | | | | true of copayments for PPO or POS insurance |
| choose a preferred care provider (PCP) from a list of | | | | policies. Higher copayments will lower the insurance |
| approved providers or network. The PCP chosen by | | | | premium. It is up to the employer to determine the best |
| the insured is responsible for all of the patient's care. | | | | deductible and copayment for employees and the |
| Seeing a doctor outside of the network is not covered | | | | business. |
| under an HMO, or it is covered at a rate much lower | | | | Lifetime medical coverage is the amount used to |
| than physicians in the network. If a patient needs to | | | | cover an employee over the course of his or her life |
| visit a specialist, the preferred healthcare provider will | | | | with an insurance policy. The typical recommended |
| need to issue a referral in order for the insurer to | | | | amount is 1 million dollars to cover serious health issues. |
| honor any claim made by the specialist. | | | | The maximum out-of-pocket limit is the maximum |
| PPO plans offer more flexibility than HMO plans in | | | | amount that a person is supposed to pay in a year for |
| choosing a physician. Preferred Provider Organizations | | | | healthcare expenses. |
| establish contracts with doctors and hospitals. People | | | | Many companies offer other forms of healthcare |
| who have PPO insurance plans are allowed to visit the | | | | coverage to their employees such as dental or |
| doctors and hospitals that they choose, but they will | | | | prescription drug benefits. These benefits greatly |
| pay more for using someone outside of their preferred | | | | increase employee morale and welfare, but every |
| provider network. | | | | additional health benefit will increase the cost of the |
| POS plans are a mixture of PPOs and HMOs. Point of | | | | premium. If employees need added benefits it may be |
| Service plans require the insured to choose a PCP | | | | wise to increase the amount of insurance cost that is |
| much like an HMO. However, they are allowed to pay | | | | transferred to employees. The practice of transferring |
| more and see a doctor outside of the network. The | | | | some of the cost of insurance to employees is a |
| singular difference is that the insurance company will | | | | typical business practice that usually ends up saving |
| pay for an out of network visit if it is the result of a | | | | money for both the business and the insured |
| referral from the primary care physician. | | | | employees. |
| Choosing a Health Insurance Provider for Your Small | | | | Small businesses can do more than provide health |
| Business: | | | | insurance to their employees. Educating employees |
| Part of choosing a health insurance plan is choosing a | | | | about healthy lifestyle choices and encouraging healthy |
| provider. Only negotiate with licensed professionals and | | | | diets and activities will greatly enhance the health of |
| look for agents who have experience working with | | | | workers. Healthy workers may do more than help |
| small businesses. Make certain to speak with several | | | | lower premiums; their attitudes and productivity could |
| agents to ensure that the best possible rate is | | | | increase as well. |
| negotiated. Always ask the agent to explain the | | | | |