Deciding to offer health insurance is an extremely difficult situation in its self, but ultimately deciding which type of system to use is just as difficult. Bizfilings states (2014), “While making a choice as to what kind of plan to offer is necessary, employers must also consider the following:
Which services your plan will cover
Which employees your plan will cover
What waiting period and eligibility requirements new employees will have
How health plan portability requirements affect you
There are three major systems to choose from; all of them have their own advantages and disadvantages. Health Maintenance Organization (HMO) An HMO is a type of managed health care system. Healthcare.gov (n.d.) explains that as long as you stay
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PPOs may also offer more flexibility by allowing for visits to out-of-network professionals at a greater expense to the policy holder. Visits within the network require only the payment of a small fee. PPO covers care provided both inside and outside the plan’s provider network. Members typically pay a higher percentage of the cost for out-of-network care. Therefore a deductible and a higher co-pay may be required at the time of service. Most of the time a physician within the network will handle referrals to specialists that will be covered by the PPO. If you go outside the policy coverage for service, a claim must be submitted for reimbursement for the visit minus your co-payment. Employees are encouraged to use the insurance company's network of preferred doctors and you usually won't need to choose a primary care physician. No matter which healthcare provider you choose, in-network healthcare services will be covered at a higher benefit level than out-of-network services. Employees will have an annual deductible to pay before the insurance company begins paying their claims. Once the deductible is met employees will be required to make a co-payment for most doctors' office visits. Some plans may also require that you cover a percentage of the total