One of the major problems many businesses face when determining what kind of health insurance to offer employees is that there are so many choices.The choices can seem overwhelming and confusing when trying to determine the right health care plan for your employees.In addition not understanding what type of health plan you are choosing can be a costly mistake.By educating yourself and understanding the choices you can make you can then determine the most cost effective choice in selecting a health insurance plan that will meet the needs of your employees.
Most popular health insurances fall under the category of Managed Healthcare Plans.All managed care plans vary greatly in benefits and out of pocket expenses, so it is important to review your health insurance and medical insurance choices wisely and try to find the best policy to fit the needs of your workforce. These are types of health insurance policies that can help employers offer their employees discounted medical insurance services by negotiating reduced charges with hospitals and physicians. There are three basic types of Managed Healthcare Plans: HMO, PPO, and POS
- HMO: This type of plan is known as a Health Maintenance Organization, or HMO.This plan would provide employers a way to take care of all their employees’ health care needs with reduced costs by negotiating with specific doctors, hospitals, and clinics. It is important to understand that these specific providers must be used by the employee for the reduced fees to be provided to their medical insurance plan.
- PPO: When using a Preferred Provider Organization, or PPO, an employer can also provide employees with reduced costs billed to their health insurance plan. This type of plan is similar to a HMO, but the employees can choose the physician they want to see instead of being solely restricted to the HMO providers. While an employee can choose between a member or nonmember provider it is important to remember that the member provider would be the least expensive choice for the employee.
- POS: When using a Point of Service plan, or POS, employees can choose their own physician that has previously agreed to provide services at a discounted fee. In a POS plan the employee would have to use the chosen physician as a gateway first before moving on to a specialist. In other words, whenever the employee would have a medical issue the POS physician must be contacted first in order to obtain the most benefit from the health insurance plan.
While many employers see health insurance as a form of necessary evil that saps their revenue it is important to realize that employers bear the cost of poor health in the form of sick days, absenteeism, reduced productivity at work, and early retirements of skilled contributors. Recent internal business studies in the United States estimate that employers spend 200 to 300 percent more on the indirect costs of poor health than they do on health benefits. The costs of poor health can be especially high for chronic conditions such as diabetes, migraines, heart disease, and respiratory problems. These costs remain even if employers manage to get out of health insurance obligations. But employers should understand that by disengaging, employers lose much of their ability to influence the costs of poor health.
Employers who understand the real costs of poor health must expect their health plans to direct patients to excellent providers, not those provider networks that offer the biggest discounts.Experts advise that most important single change necessary is for employers to think about health care in terms of value, not cost. Value can be quantified as the health outcomes that are achieved for the money spent. Cost includes not only the immediate, short-term costs of treatment but the long-term costs of ongoing care as well as the indirect cost of poor health in the business world. Employers who understand what an asset their workforce is should have the goal to increase value, not reduce the short-term costs of health benefits.