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In today's competitive marketplace, it's essential that you do all you can to attract and retain high-quality employees who can bring your business to the next level. One way your company can stand out from other businesses is to offer your employees attractive health insurance coverage options. This is particularly true for smaller firms, since only 47% of small businesses with three to nine employees offer their employees health insurance.

Offering group health insurance helps your employees manage routine costs associated with health care, including regular physical exams, prescriptions and preventative care. It also helps them mitigate costs associated with catastrophic illness or injury.

Contact the Bradley Agency today for recommendations on type of insurance (detailed below) and straight-forward advice for your business.

Fee-For-Service In the health care industry fee-for-service is when doctors and other health care providers receive a fee for each service such as an office visit, test, procedure, or other health care service. Fee-for-service health insurance plans typically allow patients to obtain care from doctors or hospitals of their choosing, but in return for this flexibility they may pay higher copayments or deductibles. Patients frequently pay providers directly for services, then submit claims to their insurance company for reimbursement.

In addition to the monthly premium, you must pay a certain amount of money each year, known as the deductible, before the insurance payments begin. The deductible requirement applies each year of the policy. Also, not all health expenses you have count toward your deductible. Only those covered by the policy do. You need to check the insurance policy to find out which ones are covered.

After you have paid your deductible amount for the year, you share the bill with the insurance company. For example, you might pay 20 percent while the insurer pays 80 percent. Your portion is called coinsurance.

To receive payment for fee-for-service claims, you fill out forms and send them to your insurer. Sometimes your doctor's office will do this for you. You also need to keep receipts for drugs and other medical costs, and you are responsible for keeping track of your medical expenses.

Most fee-for-service plans have a "cap," the most you will have to pay for medical bills in any one year. You reach the cap when your out-of-pocket expenses (for your deductible and your coinsurance) total a certain amount. It may be as low as $1,000 or as high as $5,000. Then the insurance company pays the full amount in excess of the cap for the items your policy says it will cover. The cap does not include what you pay for your monthly premium. Some services are limited or not covered at all. You will need to check on preventative health care coverage such as immunizations and well-child care.

Health Maintenance Organization (HMO) is a type of managed care organization that provides a form of health care coverage in the United States that is fulfilled through hospitals, doctors, and other providers with which the HMO has a contract. The Health Maintenance Organization Act of 1973 required employers with 25 or more employees to offer federally certified HMO options. Unlike traditional indemnity (fee-for-service) insurance, an HMO covers only care rendered by those doctors and other professionals who have agreed to treat patients in accordance with the HMO's guidelines and restrictions in exchange for a steady stream of customers.

HMOs are the oldest form of managed care and are typically the least expensive way to receive medical care. For a set monthly fee, HMOs offer a range of benefits, including preventive care. HMO plans generally do not have deductibles. Rather, you make a co-payment for the services provided. However, HMO plans require you to get a referral from your Primary Care Physician (PCP) before the plan will cover treatment by a specialist. You choose your PCP from a list of participating doctors.

If you need to see a specialist, need to be hospitalized, or need to have lab or X-ray work, your PCP will refer you to a provider or facility. Your PCP must give authorization for those services to be covered by your HMO. In addition to your co-payment, some services, such as emergency room, mental health, and chemical dependency services, may also require extra fees. If you go outside of the provider network or receive services or treatment without a referral or authorization from your PCP, those services will not be covered by your HMO plan.

Preferred Provider Organization (PPO) is a combination of Fee-For-Service and HMO. Like an HMO, you are limited to the use of “participating” doctors, hospitals or medical facilities. When you use those “participating”, “preferred” or “network” providers, most of your medical bills are covered. As with an HMO, a PPO requires that you choose a “primary care physician” to monitor your health care. Usually there is a small copayment for each visit. For some services, you may have to pay a deductible and coinsurance.

However, unlike an HMO, PPO plans also allow you to use any physician when medically necessary, which means that you can use doctors who are not part of the plan and still receive some coverage. And, most PPO plans cover preventive care. This usually includes visits to the doctor, well-baby care, immunizations, and mammograms. When you use an “Out of Network Provider”, you will pay a larger portion of the bill yourself (and also fill out the claims forms). If you opt to use a Preferred Provider from the list of participating providers, the insurance company will pay for a higher percentage of the costs. For example, a PPO plan may pay for 80% of the medical expenses if you are treated by a Preferred Provider and only 60% if you are treated by a Non-Preferred Provider. When you use a Non-Preferred Provider, you may also be responsible for any amount billed over customary and reasonable charges.  However, some people like this option because even if their doctor is not a part of the network, it means they don't have to change doctors to join a PPO.

Point-of-Service (POS) Plan combines characteristics of both the HMO and the PPO. You choose a primary care physician who controls all aspects of care, including referrals to specialists. All care received under that physician's guidance, including referrals, is fully covered. Care received by out-of-network providers is reimbursed, but you pay a larger co-payment and/or deductible.  Members of a POS plan do not make a choice about which system to use until the point at which the service is being used.  How the plan functions depends on whether individual plan members use their primary care physician or self direct their care at the "point of service."

To illustrate this point, this is how these plans typically work. When medical care is needed, the individual plan member essentially has up to two or three choices, depending on the particular health plan. The plan member can choose to go through his or her primary care physician, in which case services will be covered under HMO guidelines (i.e., usually a co-payment will be required). Alternatively, the plan member can access care through a PPO provider and the services will be covered under in-network PPO rules (i.e., usually a co-payment and coinsurance will be required). Lastly, if the plan member chooses to obtain services from a provider outside of the HMO and PPO networks, the services will be reimbursed according to out-of-network rules (i.e., usually a co-payment and higher coinsurance charge will be required). Because people who belong to POS plans are responsible for deciding how to access care within the various options, it is important that they understand the financial implications of these choices.

COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) makes it possible for most people to continue their group health coverage for a period of time. This Federal Law requires that if you work for a business of 20 or more employees and leave your job or are laid off, you can continue to get health coverage for at least 18 months. You also will be able to get insurance under COBRA if your spouse was covered but now you are widowed or divorced. If you were covered under your parent’s group plan while you were in school, you also can continue in the plan for up to 18 months under COBRA until you find a job that offers you your own health insurance.  However, you will be charged a higher premium than when you were working since your employer will not be contributing to the premium payments.