What Kind of Business Health Insurance Do You Need?

Around two-thirds of employees focus on their health over everything else—even a higher salary. They usually ask their company for help, so this matter is yours.

Do you want to increase productivity and keep employees happy? Take a closer look at your health insurance benefits.

As a business, how do you take care of your employees’ health? Offering strong health benefits is the easiest method. Keep reading to learn the different business health insurance types that suit your needs.

Preferred Provider Organization (PPO)

As the name suggests, a PPO business health insurance plan has preferred doctors or hospitals. To receive the highest coverage, employees covered under this plan must get medical care from the providers on this list.

The members pay higher out-of-pocket costs when choosing out-of-network physicians. There’s also more paperwork involved. Some PPO plans pay a small sum, but some might not provide coverage.

The benefit of this health insurance plan is that employees can enjoy a moderate amount of freedom in choosing a healthcare provider. They do not need a designated primary care physician. They can go to a specialist without a referral from their PCP.

Members must pay an annual deductible before the coverage applies to their bills. They may also have a copayment or co-insurance.

It is a good option for your business if you want a balance between freedom and lower premiums. It also saves your employees from the burden of getting a referral from their primary care doctor to see a specialist.

Health Maintenance Organization (HMO)

An HMO is a group insurance policy that allows members to seek healthcare within a network. It limits the employee’s choice of healthcare provider, and employees usually have to stick to the network of HMO-contracted companies.

An HMO plan offers lower out-of-pocket expenses for the employee and broader coverage for preventative services than other options. The employees must choose a primary care doctor for all their health concerns. When needed, the PCP can refer the member to a specialist. The member must first have a referral to get coverage from the HMO plan.

Employees usually have a copayment but may not need to pay a deductible before the policy kicks in. They have no coverage for going outside their network except in emergencies. HMOs are a great option for paying a lower premium for health benefit plans. The trade-off is the employee must stick to a network to get coverage.

Point-of-Service (POS)

A point-of-service plan has the features of both an HMO and a PPO. Like HMOs, employees must select a PCP to refer them to a specialist. The primary care doctor must be in the network of a POS plan. However, the plan does not limit them to a list of providers. Members can choose out-of-network healthcare providers, like in PPO, but they may have to pay more.

They are also likely to get lower coverage for non-network provider services. Employees must pay for the service first and file a claim for the POS plan to pay them back.

If you want a primary care physician to coordinate employee care, this is better than HMO and PPO. POS has more flexibility while providing lower premiums.

Exclusive Provider Organization (EPO)

EPO has an even more specific network of doctors and hospitals. Members must use their services to get coverage. Otherwise, the plan does not cover medical bills, except in emergency cases.

In an EPO plan, employees do not need to select a PCP or get a referral to see specialists. Still, they have to stick to in-network specialists. Members usually have a co-pay, while deductibles depend on the insurance plan. They rarely have to deal with paperwork.

EPO business health insurance plans offer even lower premiums than a PPO. The network is restrictive, but the advantage is that members do not have to coordinate through a PCP.

High-Deductible Health Plan with a Health Savings Account (HSA)

A health savings account works like a 401(k) or flexible spending account (FSA). It’s a bank account for members to save money, specifically for medical expenses in the future. They may have to pay a penalty fee and interest for non-medical events.

Participants can make pre-tax or tax-deductible contributions. However, the IRS sets a contribution limit each year. For 2024, the limit is $4,150 for self coverage and $8,300 for family.

Unlike an FSA, HSA funds roll over yearly and earn interest tax-free. The employees own this account, but you can contribute. HSAs must pair with a compatible high-deductible health plan (HDHP). This means employees have higher out-of-pocket costs to pay. However, the plan pays for 100% of the costs beyond the deductible.

Like other plans, preventive care is free even if the member hasn’t met the deductible. They can use their HSAs to cover the costs of other medical care.

The IRS also sets the maximum out-of-pocket costs. For 2024, it’s $8,050 and $16,100 for self and family coverage, respectively. The minimum deductible is $1,600 and $3,200. The healthcare providers you can use depend on the plan. It can either be PPO, HMO, POS, or EPO.

The premiums for HDHP plans are lower, making it a good choice for businesses that cannot afford a group health insurance policy. It also gives you greater control over the amount you want to contribute to health employee benefits.

Choose the Right Business Health Insurance Plan Now

The best business health insurance plan depends on the needs of your employees. Of course, the capacity of your business to provide is an enormous factor. Yet, remember that it’s your employees who will have to live with the policy.

Consider what’s better for your employees to make them productive and loyal in the long run.