Employee health insurance options

With the rising cost of healthcare, businesses and employees are being forced to pay higher rates or cut back on employees to pay for the health insurance costs. Employee health insurance costs over $7,900 per person and that cost is only expected to rise. What can employers and employees do to combat the health insurance costs? Here are a few health insurance options to consider:

Fee-for-Service Plan
A fee-for-service plan is popular with people that like to pick their own doctor or their own clinic. They don't like to be excluded to the covered doctors. The insurance provider normally picks up half or most of the costs associated with your medical visit. There are several fee-for-service providers out there. The most common fee-for-service providers out there are Blue Cross and Blue Shield.

Fee-for-service coverage is divided into a basic coverage and major medical plan. The basic coverage will include the routine doctor visits, surgery, hospitalization, and similar medical expenses. Once you max out of your basic coverage, the major medical coverage kicks in. The major medical coverage will cover against large medical bills that could potentially bankrupt people.

Companies like fee-for-service plans because they can set limitations on the policy. Normally larger companies use the fee-for-service plan instead of the smaller businesses. Employers can decide how much money they will pay per employee, and then the employee is in charge of covering the rest of the premium. Employers have the right to terminate employee coverage when the policy period ends. Some employers will do this if the employees have several expensive claims.

Health Maintenance Organization
Health Maintenance Organizations (HMOs) are popular with employers and employees. The government has mandated that companies which employ more than 25 employees must offer an HMO plan. There are monthly fees the employee will need to pay with an HMO, but the co-payments are smaller and there usually aren't any deductions. HMOs are attractive for healthier employees that do not use their health insurance often.

HMO plans encourage people to come in for immunizations and well-visit exams. It will cover all routine check-ups, lab work, x-rays, immunizations, and minor illnesses. Companies have found that they lose less work time from their employees that have HMO plans because they do not visit the doctor as much. The downside to HMO plans for employees is that they are limited on the doctor they can go to. This may mean they need to receive approval from their regular doctor before they can go to a specialist and they can only go to a specialist that is covered. Even though it is a hassle, the costs are significantly lower than traditional health insurance costs. Employers often prefer HMO plans because the premiums are cheaper. Since employees do not use their insurance as much, they actually save money on employee health insurance.

Preferred-Provider Organization
Preferred-Provider Organizations (PPOs) are another common insurance type. PPOs work similar to an HMO except you do not pay in advance. With a PPO, you must attend the cooperating doctors and visit the in-network clinics and hospitals. You only pay for healthcare when you need it. As long as you go to doctors that are in-network, you will not be responsible for additional charges. The co-payments are normally lower when you do visit the doctor. If you have double-coverage, the PPO plan could pick up all of the additional costs you have left-over from your primary insurance provider.

Other Options
Health savings accounts (HSAs) and Flexible spending accounts have become popular with several employers. The HSA or Flex-spending account allows the employer to set aside some money into the account before taxes. The money in the account can be used to pay for any medical expenses. The employee can contribute extra money to the account also. Since the HSA and Flex-spending accounts work similar to checking accounts, employees do not like to use the money often. They normally do not visit the doctor unless it is for a routine visit.