Best Health Insurance Plans for Small Business Owners

If your business is a small fish in a big pond, you will find that purchasing health insurance for your employees is an ominous chore. On an individual basis, the costs can be staggering. The trick is to find some other fish, with the same needs, and if you act as a group, you will be able to reap the benefits of a lower health insurance premium. This is often accomplished through a Managed Care system, and these are often available through a Chamber of Commerce, or an industry association. A Managed Care system is a term that describes the structure and benefits of a PPO, HMO, or POS. What are those you ask?

PPO means Preferred Provider Organization. This is a group of hospitals and other health care providers that get together to accept negotiated fees for services from covered persons. In this scenario, an insured person can select a health care provider from outside of a “network,” which is a term to describe the group of hospitals and other health care providers that are participating. They may also however choose to use someone outside of the network, but the cost will usually be higher for the insured.

Health Maintenance Organizations or HMO’s are programs limited by a geographic area. People insured through an HMO must use hospitals and other health care providers that subscribe to their plan. They do see a significant cost savings however and better overall benefits like low or no deductibles and small co pays. You can take a vacation without worrying about hospital availability away from home as emergency services are usually covered if required out of the network.

In an HMO, the doctors are usually employed directly by the HMO. This is called a “Staff Model.” There is also an Independent Practice Association model, where doctors are independent and work for an HMO on a contract basis. In either scenario, the insured person must choose a primary care physician who will be responsible for making all of the health care decisions for that person.

Finally, a Point of Service arrangement or POS arrangement is available. This functions like an HMO but allows for services out of the network. Because there is less control by the insurance company regarding the treatment options, POS plans will usually cost more in terms of premiums.

If you are a small business owner, shop carefully for your health insurance coverage. You will want to start locally, with your Chamber of Commerce and local business associations. Then be sure to check out national organizations as well. Another way to find out where your next health insurance plan will come from is to speak with your vendors and your competitors. The ones that have been around for a while will have some similar experiences and may be able to offer valuable advice.