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Offer Group Health insurance and
insure the future of your business
The health insurance industry has
changed rapidly during the managed care revolution. If
and when an employer decides to offer group health coverage
to his employees, deciding which type of plan to offer
as well as which company to use is no simple task.
- Which is the way to go –
Indemnity plan, HMO, preferred provider organization
(PPO), point of service (POS)?
- Would my employees prefer going
to their own doctors or would the physicians available
in an HMO be sufficient?
- Which plans to offer alternative
medicine treatment?
- How many people do I need in
order to qualify as a group?
Usually, the deciding factor in selecting
a plan for most business owners ends up being the bottom
line or monthly expense. But just as important as premium,
there other more important considerations when selecting
a quality health plan for employees. After all, offering
a top flight health plan can insure the future of a
business. A good health plan can help retain good employees
and aid in attracting prospective employees.
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| Group Health Plan will
protect your employees and their family -
a good health plan can help retain good employees
and aid in attractive prospective employees. |
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HMO's, PPO's and POS's have many features
in common. But in the end, each of the more than 1,000
plans now in existence is distinct in its own way. Benefits
offered and premiums charged may be similar - but the
quality of the provider selected, responsiveness to
patients complaints and general policies that the plans
operate under may be worlds apart.
Group health plans are categorized as small (2 to 50
employees) and large (50 and above). Prior to July 1,1997,
the smallest group allowable was a 3 person group. When
the industry realized it was missing out on a significant
number of new group cases they reduced the minimum size
group to 2. This enabled the growing number of entrepreneurs
now working from home to qualify for group rates.
Previously, point of service plans were structured so
that an insured needed a referral from their primary
care physician to see a specialist out of network. Most
POS plans now offer Open Access (no Gatekeeper) plans
which eliminate the need for referrals. The only significant
difference between gated and non-gated plans is cost
(non-gated plans are typically 4-5% more than gated
plans).
Some well known health carriers have
been in the news recently, most notably Oxford Health
Plans. One of the more popular plans in the tri-state
region, Oxford has experienced extraordinary membership
growth during the last few years. In order to handle
the increased demand in claims processing, Oxford was
forced to make a major computer conversion. During the
conversion, they experienced problems resulting in delayed
claims and other billing problems. We look for Oxford
to resolve these problems, remain strong and continue
to offer quality health plans.
Our agency will continue to monitor
developments in the managed care revolution and our
benefits professionals invite you to call us about health
coverage that's affordable and fair.
What is the difference to the employee
if the insurance plan is a PPO, HMO or POS?
Under a PPO plan, the employee
may choose to use designed providers (a.k.a.: Preferred
Providers, Participating Providers. Network Physicians.
PPO Physicians) or providers that are not affiliated with
the plan. If the chosen provider is in the network, the
charges incurred are paid at a higher benefit level than
if the patient chooses a provider outside of the network.
For example: The PPO physician's charges are paid at 100%
while the non-PPO physicians are paid at 80%. If the plan
is a 90/70 plan the network physician is paid at 90%,
while non-network physician is reimbursed at 70%. In a
PPO plan, the lower benefit - the benefit paid for non-network
providers - is usually comparable to an indemnity plan
benefit (80% or 90%). Many plans also contain a small
co-payment (i.e. $10) for in network office based MD services.
Out of network services will also have deductible and
co-insurance requirements.
Under an HMO plan, the patient is provided health coverage
for a wide range of comprehensive health care services
(including preventive car, well child care, immunizations)
at a fixed periodic payment (monthly premium). The patient
is locked in to the usage of plan providers, and in most
cases must work through the PCP. There are no deductibles
or coinsurance payments. Nominal copayments/encounter
fees may apply. No coverage is provided for services performed
by non-plan providers, unless those services are authorized
by the plan prior to their provision. Authorization is
based on medical necessity. It is important to note that
HMO's assume contractual responsibility for the provision
of services and are considered “Health Care Plans”,
versus Indemnity, or PPO coverages, which are considered
to be insurance-based and covering services provided.
The managed care Point of Service plan has as its core
an HMO contract but offers a covered member, at the point
of service and contingent upon the in-network procedures
and benefit levels, the choice of out-of-network providers
of service. The out-of-network benefits are subject to
deductibles and co-insurance factors. The POS plan therefore
has the look and feel of the indemnity or PPO indemnity
contract, but with lower premium levels. There are valid
reasons for this:
- Indemnity plans afford more
liberal benefit levels in certain areas and enjoy
more subjectivity in R & C and contractual interpretations.
- Managed care plans are very
active in the initial determination of and the continual
disposition of the level and extent of care their
members receive. If not contract specific, benefit
durations as well as appropriate levels of care are
subject to on-going monitoring and may be altered.
In or out of network status does not affect such procedures:
they are necessary components which allow managed
care plans to meet their objective: delivery of the
most appropriate level of care in an efficient cost-effective
manner.
- There are required disciplines
and protocols which end-user members must acquaint
themselves with, again regardless of network status.
Disregard of such requirements may result in financial
penalties or complete claim dental.
It becomes evident that both indemnity
and managed care group medical plans require presence
of medical necessity in order to qualify for benefit activity.
Once qualified, the type, duration, and level of that
activity may differ. Quality care may be achieved in either
environment, but the environments are different and bottom
line premiums will be reflective of same. |
