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Group Health Insurance

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Spotlight on: Group Health Insurance

Group Health Insurance Plans vs. Group Health Plans

You may assume that group health plans and group health insurance plans are the same, but they’re actually different.

Group Health Plans

There are multiple ways for employers to finance group health plans. Common financing options include self-funding (ASO), level-funding, captives, exchanges and fully insured.

These plans are defined as “employee welfare benefit plans established or maintained by an employer, employee organization or both, that provide medical care for plan participants and their dependents.” They’re usually covered by the Employee Retirement Income Security Act (ERISA) and must comply with its standards of conduct and fiduciary responsibilities.

Our professionals are well-versed in plan design and cost-control and can help you decide which option makes the most sense for your organization.

 

Most plans fall into one of the following categories:

  • PPO
  • HMO
  • HDHP
  • Reference-Based Pricing
  • EPO

 

The Higginbotham Difference

We value health, so we work hard to offer you the best benefit options for your company. Since health can be both personal and financial, our relationships with reputable national insurance carriers help you get the employee benefits you need and the cost control remedies you want. We know from experience that an employer-sponsored health insurance plan can save your employees money on both premiums and out-of-pocket expenses.

No matter what employee benefits you’re considering, our prices are competitive, our fees are clear and our deep industry relationships allow us to go above and beyond while delivering year-round value.

To learn more about how our values-based approach drives value for you and your employees, click here.

Or visit our Insights page to learn more about how group health plans work.

Talk to a Seasoned Group Health Insurance Professional

If you have questions, we have answers.

Higginbotham’s team of experienced group health insurance specialists is here to answer your questions and help transform your uncertainties into opportunities.

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Work with an employee benefits broker who cares.

Group health insurance plans, which can pay for health care expenses for employees, give workers peace of mind. And a good plan can also increase their loyalty to your business.

If you’re looking for creative ways to improve your success in recruiting and retaining good people, group health insurance may be just the edge you need.

We’re here to take the headaches out of group health insurance, freeing you to focus on growing your business.

With Higginbotham, you get:

  • A local broker to help answer your questions and educate your people
  • Deep insurance carrier relationships to help get things done others cannot
  • A partner who starts with listening and ends with customized solutions
  • Year-round support with communications, compliance…even COBRA

 

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Preferred Provider Organization (PPO)

A preferred provider organization plan, or PPO, is more flexible than a health maintenance organization plan, or HMO, but can be more expensive.

Rather than require the election of a primary care physician (PCP) and referrals as a prerequisite to access care, a PPO plan allows employees to visit any in-network health care provider.

While a PPO does not require a PCP referral to visit a specialist and may extend some degree of coverage for out-of-network service providers, out-of-network services often carry higher out-of-pocket costs.

 

Health Maintenance Organization (HMO)

Typically the cheaper of the two most common group care coverage options, an HMO, limits eligible health care service providers to a predetermined network of in-network physicians.

After enrolling in an HMO, the employee selects a PCP who acts as the gateway to other in-network medical service providers and must provide referrals as a prerequisite to specialist treatments and other secondary care.

For example, if you need to see a podiatrist as a member of an HMO plan, you first need to schedule an appointment with your PCP, describe your issue and have the PCP refer you to an in-network provider.

Though HMO plans often have lower premiums in comparison to PPO health insurance, their in-network referral requirements make them less flexible.

Because they don’t offer coverage outside of their approved provider network, the total cost of care under an HMO may be higher than a comparable PPO for some plan subscribers.

It’s wise to work with a health insurance consultant to determine which plan will be the most cost-effective and beneficial for you and your employees. If you’re interested in learning more about the options available to your business, our seasoned employee benefits specialists are happy to help.

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Reference-Based Pricing

With pricing outside of the traditional rates set by insurance carriers or rented networks, reference-based pricing can help reduce out-of-pocket costs.

Instead of carriers or networks negotiating discounts from provider-billed charges resulting in a “contracted-rate” or “allowed amount” that the health plan pays the provider, reference-based pricing determines provider reimbursement by a percentage of what Medicare would typically pay the provider. This usually ranges from 120 to 170 percent of Medicare reimbursement.

Useful Information to Share with Your Team

Your team is going to have a lot of questions about their health insurance. Here’s some insight to help give them the answers they need.

 

How does group health insurance work?

Designed to help businesses reduce health care costs for employees and their dependents, a group health insurance policy splits the cost of coverage by way of blanket coverage provided to all participating employees, with premium cost split between the employer and the employed. An insurance carrier pays for the agreed-upon portion of your employee medical costs outlined in your policy in exchange for premium payment and an employee copay.

Typically, the higher the monthly premium cost you pay, the lower your employee deductible will be. Group plan coverage can help with the cost of checkups at the doctor, prescriptions, emergency room visits, long term care and more.

In most cases, buying into an employer group health plan is more cost-effective for an employee than purchasing individual or family coverage independently.

While a group plan can improve job satisfaction, retention and recruiting capabilities, there are requirements an employer should understand.

How many employees are needed to qualify for group health insurance?

If your business employs one or more people, you may be eligible to purchase group health insurance coverage.

Depending on the size of your full-time employee group, you will fall into one of several market segments based on insurance carrier guidelines and state and federal laws. Your market will dictate the types of products available and pricing strategies.

Why offer group health plan benefits?

Group health insurance plans can help take care of your employees’ health needs, improve their satisfaction and increase employee retention.

Group health plans can also lower the total cost of care compared to similar individual health insurance options.

These savings are achieved through the larger risk pool created by group enrollment. In other words, a plan with many employee participants enables the insurance carrier to spread the risk, offsetting the increased cost of covering high-risk participants with the reduced cost of covering low-risk participants.

In addition to premium savings for employees, group plans can also save businesses money through tax benefit, because employer contributions are tax-deductible, allowing participating businesses to offset their payroll and income tax liability.

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Want to learn more about the group plan options available for your business?

Give one of our employee benefits specialists a call today to find out what Higginbotham can do for you.

Talk to an Employee Benefits Specialist

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