Business Health Insurance Guide

By: EconomyWatch Content   Date: 2 February 2010

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Business health insurance covers the insurance needs of you and your employees. The definition may sound simple, but in reality business health insurance is a complicated world of plans, laws, and rules. In most cases, business healthcare coverage depends on geography. In the US, more than two-thirds of businesses offer health insurance for their employees. In short, a skilled employee always prefers an employer who gives health insurance.

Business Health Insurance: Types

Indemnity Insurance: In this type of insurance, the coverage is provided by the insurer or the employer at a particular premium. The insured or an employee can pick any healthcare provider and have the costs reimbursed by the insurer. This scheme works best if the insurer is a large corporate entity.

Health Maintenance Organizations (HMO): HMOs are made up of hospitals, physicians, and health care providers that are tied up with an insurer to provide medical care to its employees at a negotiated rate. The HMO model of health coverage uses a Primary Care Physician (PCP) to coordinate with the insurer and take care of the plan. The PCP refers the patient to a specialist if specialty care is required. Though healthcare facilities are limited to those within the scope of the HMO, the insurer can refer to a specialist outside the HMO with the PCP’s referral.

Preferred Provider Organizations (PPO): PPOs are similar to HMOs in many aspects, but are often more restrictive. While HMOs are connected to multiple hospitals, insurers who are attached to PPOs have a dedicated network of specified hospitals and physicians. If the insurer goes out of the PPO network for a specialized care, they has to pay for most of the services without any assistance from the PPO. Under a PPO plan, the premiums are reduced, but so are healthcare options.

Medicare and Medicaid: Medicare is a health coverage scheme provided by the government to those over 65, or disabled. If your enterprise has employees aged 65 years or more, Medicare is of great help. Medicaid is also a government sponsored health insurance scheme meant to help poor and low-wage workers.

Most American businesses follow either or a combination of these health insurance schemes for their employees.


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