Plan Type Comparison
Here’s a breakdown of what various plan types typically feature. As you read about each type, just remember that today’s health coverage market often offers “blends” of these traditional types.
* Monthly premiums represent the total cost for a single employee. If you share premium costs with the employee, your business costs will be less. Price ranges reflect California averages on July 1, 2011; premiums for your business may differ depending on your location, employee’s age, and other factors.
|Option||What is covered?||Whom can you see?||Cost-sharing at time of service||Monthly premium*||Summary|
|HMO||Usually comprehensive.||Limited network; no benefits for services outside network. Generally, services must be referred by primary care physician (some exceptions such as preventive gynecological exams, emergency services, etc.).||Typically low copayments at time of service ($10 to $30); no co-insurance.||Typically medium range ($300 to $500).||Makes sense when employees are willing to give up flexibility in provider choice and accept greater management of their care. Also offers benefits in terms of ease of administration. Less attractive if some or many employees feel strongly about having access to a wide selection of providers.|
|PPO||Usually comprehensive.||Any doctor, but benefits reduced for services outside the network.||Typically have copayments between $10 and $40, co-insurance up to a deductible.||Depends on cost-sharing. High deductibles usually mean lower premiums ($275 to $500) and low deductibles mean higher premiums ($500 to $900).||Good option if choice of providers is important to employees. Employees should be willing to assume responsibility for some administrative duties (such as obtaining referrals or submitting claims).|
|POS||Usually comprehensive.||Any doctor referred by primary care physician; benefits reduced for services outside the network if not referred by PCP.||Contact a broker for detailed information on costs. In California, small group POS plans are less popular than other plan types available to small business owners.||Contact a broker for premium quotes.||Offers more flexibility than HMOs but less than PPOs. Employees should be willing to assume responsibility for some administrative duties (such as obtaining referrals or submitting claims).|
|HSA||Comprehensive up to savings account limit, and usually comprehensive above deductible. Employee responsible for share of deductible after savings account funds are spent.||Below deductible: any doctor. Above deductible: benefits generally reduced for services outside the network.||Employee pays with spending account funds, and then out-of-pocket, up to a high deductible (for example, $4,000). Copayments and/or co-insurance apply after deductible.||Usually a low-cost option (for $4,000-deductible policies, monthly premiums around $450). Policies with higher deductibles typically have lower premiums.||Good option if employers and employees share an interest in keeping monthly premiums low. Employer must be willing to set up and administer savings accounts; insurance carriers, financial institutions, brokers and other advisers can help. HSAs may be less attractive to older and sicker employees, whose health needs may use up their savings account and require additional out-of-pocket payments.|