Health insurance is probably the most important benefit that employers provide to their employees. For workers, employer-provided health coverage gives them some security about their own and their family’s health that is typically more affordable than individual insurance. To remain competitive in the marketplace and attract top employees, employers need to offer the best health coverage they can.
State & Federal HR and Benefit Law Compliance
The federal Patient Protection and Affordable Care Act (PPACA), more commonly known as Health Care Reform, implements sweeping changes that affect individual and employer-sponsored health plans.
Major provisions of the law affecting employers and group health plans, including dependent coverage to age 26, grandfathered plans, employer shared responsibility ("pay or play"), and SBC notice requirements change often. From required notices to maintaining compliance with the Affordable Care Act we have you covered.
Types of employer-provided health coverage
Health Maintenance Organizations (HMOs)
HMOs are legal entities made up of medical providers who provide care for a fixed, periodic fee per person, who selects a participating primary care physician. To be covered by an HMO, the medical service must generally be provided by an in-network provider or by one referred by the primary care physician. Covered services generally include:
- Routine office visits
- Diagnostic tests
- Hospital care
- Surgery
- Emergency care
- Preventive services
Preferred Provider Organizations (PPOs)
PPOs are networks of doctors, hospitals and other medical professionals who contract with a health insurer to provide services to its members. PPOs can benefit members with lower out-of-pocket costs, such as deductibles, co-payments and co-insurance.
Reference-Based Pricing Plans (RBPs)
These plans are not based on networks, so they generally don’t limit coverage to specified doctors, hospitals or other medical professionals. Instead, the payment is based on Medicare rates plus 10% to 50%. The goal of RBP plans is to lower claims costs versus a standard PPO plan.
Point of Service (POS)
Point of service plans combine features of HMOs or PPOs with traditional indemnity plans. Under a POS, a patient may receive services from preferred or non-preferred providers. However, a patient may receive higher benefits by visiting a preferred provider after consulting with their primary care physician.
High Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs)
Many employers choose to sponsor a high deductible health plan in conjunction with a tax-saving Health Savings Account.
An HDHP has:
- A higher annual deductible than typical health plans.
- A maximum limit on the sum of the annual deductible and out-of-pocket medical expenses. Out-of-pocket expenses include co-payments and other fees, but do not include premiums.
A Health Savings Account (HSA) is a tax-exempt trust or custodial account that an employee sets up with a qualified HSA trustee (a bank or insurance company) to pay certain medical expenses. To qualify for an HSA, the employee must be covered under a high deductible health plan.