Different Types Of Health Insurance - Which Type Should You Be Covered?

Many small business organizations today include health insurance in the benefit extended to its employees

. Instead of higher wage, health insurance can be added to the compensation. There are some states that make health insurance mandatory - that businesses should make provision for health care benefits to its employees. The key to provision of optimum insurance is to have the best type of policy - coverage-wise and premium-wise.

The types of health insurance plans available to small business firms

1.Indemnity Plans

The indemnity plans are the major medical plans. This allows the patients to have the freedom to choose their attending doctors. One requirement of most indemnity plan heath care coverage is the payment by the insured of some deductible amount. This deductible must first be settled by the insured before any payment is made by the insurance provider. After the payment of said deductible, the insurance will cover a part of the medical expenses, in most cases the amount covered is 80 percent.

2.Health Maintenance Organization

The HMO insurance is not as flexible as the Indemnity plan when it comes to choice of doctors. The insured will be required by the HMO to choose a preferred care provider (PCP) from a list of accredited providers or network. The doctor must be within the accredited network otherwise he may not be covered by the health plan. In cases where the doctor is outside of the network, the covered rate may be lower than the doctors in the network or preferred list. Should a specialist be needed by the insured, he or she has first to secure referral from the preferred healthcare worker so that the insurance provider or insurer can acknowledge the payment.

3.Preferred Provider Organizations

The PPO Plan is more flexible than the HMO when it comes to choice of doctors. The PPOs make contact with doctors and hospitals. The insured with this type of insurance plan can choose their doctors, however they have to pay more if they opt for one who is outside of the preferred provider network.

4.Point of Service Plans

Point of Service or POS Plan is a mixture of the PPO and HMO. The insured will choose from the preferred care provided (PCP) in the list of accredited. This is similar to the HMO. But like the PPO, they are allowed also to have a doctor outside of the network as in PPO. The difference is in the need for a referral from the primary care physician in order for the insurer to pay the doctor outside of the network.

In essence, the different kinds of insurance a small business can provide differ in the choice of attending doctors. All the doctors in the network are qualified, but then there are insured people who prefer physicians of their choice.

by: alona Rudnitsky

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