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Type of Insurance Plans for Business

Type of Insurance Plans for Business

What are the different kinds of health insurance plans prepared for the small business?

There are two categories under which a group insurance plans fall. Mainly group insurance plans are accepted the business groups for the employees. These two categories are Indemnity Plans and managed care plans. You have to do a lot of paper work for indemnity plan but this plan provides you flexibility in health care provider’s selection.

Your employees do not need to go for any primary care physician; they can directly approach to the doctor. An annual deductible is to be made in this plan. Your employees have to make a straight payment before claiming for the plan. Managed care plans ( PPOs and HMOs) prepare the network of healthcare providers. You can take services from doctors and other providers at negotiated prices and submit the bill directly to the insurance company. A managed care plan is good for having less paper work whereas the indemnity plan gives you flexibility regarding selection of doctors.

In which way does the preferred provider organization plan works?

Preferred provider organization (PPO) works with a network Members of this network can accept services at prenegotiated rates. Whenever the member of this network goes to a doctor, he/she has to make a small payment every time. If the member prefers a doctor outside the network, he/she have to pay a significant amount of the medical bill.

In which way does the plan of health maintenance organization (HMO) works?

A health maintenance organization is less flexible than PPOs and Indemnity plans but allow members for the lowest out of pocket expenses. A patient first has to move to a primary care physician for his approval before approaching a specialist. Traditionally HMOs give stress over preventive care. This plan generally does not cover newer medical procedure especially which are expensive (arguing it as an experimental). But HMO is well known to deliver better care than PPOs and Indemnity plans.

What are the major models used under HMO?

Three major models are there:

  • Staff model: In this model, doctors use both the building and employees of HMO.
  • Group model: In this model, HMO does not pay to the doctor, instead it makes payment to the group of doctors and the group distributes the amount among doctors.
  • Network model: In this model HMO pays to the network of doctors. This model is the most common one today.
In which way does the plan of service (POS) functions?

Plan of services is the mixture of the feature of both PPOs and HMOs. POS plan encourage a patient with cost incentives to choose the primary care physician within this network. The patient does not have to make an upfront payment within the network and can take services from the doctors of outside network but can submit a claim for this visit. This plan encourages the patient to choose far any services. Members of this plan have three choices:

  1. A member can receive coverage like a HMO plan if goes through the POS.
  2. Members can receive care through the PPO providers and coverage under the guidelines fixed under “in-network”.
  3. Members can go to the primary physician both outside the network or the PPO network and receive care under the guideline set in “out of network”.

    The good point of POS plan is it offers greater flexibility but co-payments and high deductibles for the care from non network providers.
In which way does the indemnity plan work?

Indemnity plan offers higher flexibility but with a lot of paper work. In selecting physicians. You can directly go to the specialist without approaching the primary care physician. What you have to do is make payment of the medical bills until the annual deductible is met.


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