|Small Group Health Insurance Options|
It is almost always better to purchase health insurance as a member of a group rather than as a family or individual. Rates for small business and the self employed tend to be more affordable while offering plans with a higher level of coverage.
Insurance companies are able to offer rates at a low cost to a group since they can ‘spread the risk’ among several people. When you buy a policy on your own, the underwriters look primarily at your personal risk factors such as your medical history and lifestyle. You are rated as an individual and your insurance company may even exclude coverage for certain preexisting conditions.
Most insurance carriers can offer higher quality medical plans to groups at lower rates than that of individual coverage. For example, a group policy may cover pregnancy and delivery of babies, mental health problems and other conditions that are often excluded or limited in policies sold to individuals.
Most people obtain group health insurance through their own or their spouse’s employer. If you cannot get health insurance through your and your spouse’s workplace, you may be a member of a club, trade association or other organization that already offers group health insurance, such as your local chamber of commerce, better business bureau or even your church.
If you own a business, you may still qualify for a group rate even if you have just one or two employees. Finding a group plan will probably lower your own health insurance costs. If you offer health insurance as a benefit, it may help you to retain good workers, and the premiums are tax-deductible.
Group coverage often gives you choices. You can choose to include “wellness benefits,” which may cover routine physicals, screening procedures, immunizations, etc. You may want to include coverage for dental and vision services, prescription drugs, disability and even long term care.
As an employer, you can simply offer a group policy that your employees can pay a large portion of themselves, or you can choose to pay most or all of the premiums. Some employers pay the yearly deductibles on their workers’ insurance coverage.
To save costs, you can choose to buy a managed care plan instead of a traditional policy. Traditional coverage allows you to use nearly any provider or medical facility for your health care, but this kind of insurance is rapidly losing popularity because it is too expensive. With managed care programs, you are required to use the doctors, hospitals and other medical providers who operate within a network approved by the insurance company, in order to receive full benefits.
With a Health Maintenance Organization or HMO, you pay a regular monthly membership fee along with co-payments every time you need care. Your family physician oversees your health care. If you want to see a specialist, you usually need a referral from your family physician.
With a Preferred Provider Organization (PPO), you still use a network of providers but you have the choice of going outside the network at a reduced benefit level. You can also refer yourself to a specialist. PPOs usually have an annual deductible that members must pay before the insurence carrier makes payments. After members meet their deductibles, they must also pay a percentage of their additional medical costs. This is called “coinsurance”.
Health Savings Accounts (HSAs) are a new idea in health insurance. Basically, a HSA is a PPO with a very high deductible. You put your annual deductible in a tax-deductible savings account. If you need to use that money for health expenses, you can withdraw it without penalties.