Should I Offer Multiple Health Plans?
After monetary compensation, health insurance is the most desirable benefit for most employees. If you offer only one health plan, your employees are limited in their healthcare choices. Offering a choice of health plans can make your benefits package significantly more attractive to existing and prospective workers.
What Are the Benefits of Offering Multiple Health Plans?
Offering multiple health plans empowers employees, and it can improve engagement, retention, and recruitment. Healthcare is not a one-size-fits-all activity. Each employee is different and offering a choice of plans caters to the diverse needs of your workforce. It gives employees the power to select the health plan that provides the right amount of coverage at the best cost.
- For example, to save money, a young, single employee in an entry-level position may prefer a high-deductible plan along with a health savings account. This combination comes with lower premiums and lower taxes because pre-tax dollars are used to pay for out-of-pocket healthcare costs.
- On the other hand, employees with medical issues may prefer a lower deductible plan with higher premiums. Employees who are raising families are also likely to prefer this type of health coverage, because of the greater expense predictability it provides.
What Are the Different Types of Health Plans?
Employers who offer different types of health plans allow employees to customize their healthcare choices. The three basic plan types are:
- HMO: A Health Maintenance Organization (HMO) requires employees to remain in-network for their healthcare. However, networks are typically large, and plan members can save money if they do not need a variety of specialists and they are able to wait for referrals.
- PPO: This stands for preferred provider organization. Like an HMO, a PPO has a network of healthcare providers. It offers more flexibility, however, because plan members are free to receive care from any doctor, hospital, or specialist. PPOs do not require referrals and plan members are not required to choose a primary care physician. On the downside, PPOs typically come with higher premiums and out-of-pocket expenses.
- HDHP: High-deductible health plans can be a good option for both employers and employees. They tend to have low premiums and offer a greater choice in providers than HMOs. An HDHP can be combined with a Health Savings Account (HSA), which allows employees to set aside pre-tax dollars to cover out-of-pocket healthcare expenses.
What About Different Coverage Levels?
Another way to give your employees a choice is to offer different coverage levels within the same type of plan. Employees can choose whether they want to pay more in premiums or pay more in deductibles, coinsurance, and copays. Coverage levels are described in a metal tier:
- Platinum: The plan pays 90% of medical expenses and the member pays 10%.
- Gold: The plan pays 80% of medical expenses and the member pays 20%.
- Silver: The plan pays 70% of medical expenses and the member pays 30%.
- Bronze: The plan pays 60% of medical expenses and the member pays 40%.
Contact our knowledgeable agent for assistance with offering multiple health plans and your employee benefits package.