Health insurance ranks at or near the top of just about every survey on employees’ benefits. In the latest study released in 2022 by MetLife, 86% of workers said they consider health insurance a “must have” and another 10% said it’s a “nice to have” benefit. Just four percent said health insurance is not needed. That puts health insurance at the top of the employee priority benefits list.
With that in mind, you may be asking’ “What’s your best choice when it comes to offering health insurance to employees?” Is it a flexible PPO (Preferred Provider Organization) plan? Or, maybe, the low-cost HMO (Health Maintenance Organization) plan? It could even be the lesser known EPO (Exclusive Provider Organization) plan? The best choice depends on several considerations.
Here’s a snapshot highlighting the benefits of HMO, PPO and EPO plan options.
With an HMO, each insured person must choose a Primary Care Physician (PCP) to manage care. Patients need to get approval from the PCP to visit a specialist. Treatment is generally not available outside of the HMO network, except in case of an emergency.
Premiums for an HMO are typically lower than for other coverage, and co-pays are typically lower than with a PPO.
A PPO offers more flexibility, although at a higher premium than an HMO or EPO. A patient can go directly to an in-network doctor, specialist, or hospital without a referral.
In-network care is offered at pre-negotiated, discounted rates through contracted medical providers and hospitals. PPO members can go outside of the PPO network, although they will pay higher out-of-pocket costs. That could include a separate out-of-network deductible and out-of-pocket maximum.
An EPO is often described as a hybrid plan that offers both HMO and PPO benefits. Like with an HMO, EPO patients need to get health care through a doctor, specialist, or hospital that is part of the EPO network. Similar to members of a PPO, EPO members are able to go to a specialist without a referral, as long as the provider is in-network.
EPO premiums are typically lower than PPO premiums, although they may exceed HMO premiums. There are typically no or low co-pays when visiting an in-network EPO provider. Care outside of the EPO network may not be covered, except in case of an emergency.
A High Deductible Health Plan (HDHP) – which can be an HMO, PPO, or EPO – may offer your employees an even lower monthly premium than other HMOs, PPOs, or EPOs. The potential disadvantage with an HDHP is that the insured must pay more costs upfront before the HDHP begins to pay its share.
A potential offset is combining an HDHP with a Health Savings Account (HSA). That allows insured plan members to pay for qualified medical expenses with funds free of federal taxes. That includes deductibles, copayments, coinsurance, and related health care expenses. For more information about HSAs, visit the health care glossary on the federal HealthCare.gov website.
Maximizing Your Benefits Dollars
Making the most of your employee benefits dollars is a challenge for many employers. You want to be able to offer comprehensive benefits to your employees. But you also want to control costs for your business. CaliforniaChoice allows you to do both.
For more than a quarter-century, CaliforniaChoice has offered small businesses in California the opportunity to offer more, while helping them control costs. CaliforniaChoice puts you in control by offering everything you and your employees want:
- Eight health plans – and dozens of coverage options – through a single health program
- Cost control with Defined Contribution – you choose the amount you want to put toward your employees’ health care
- Greater access to doctors, specialists, and hospitals
- Options for Dental, Vision, Chiropractic, and Life Insurance
- Consolidated billing – one bill for all coverage (even if employees enroll in multiple health plans)
CaliforniaChoice meets the diverse needs of you and your employees at a price each of you can afford. You might prefer a PPO from Anthem Blue Cross because you or your spouse will have access to a particular doctor or hospital in the Anthem network. Someone else in your group might prefer a local or regional HMO. With CaliforniaChoice, you can select coverage from Sutter Health Plus, Western Health Advantage, or Sharp Health Plan.
Another person might want an HMO operating across the state like Health Net or UnitedHealthcare. Someone may want to save with an HSA-compatible plan. Or, some employees might want an HMO from a centralized health care system like Kaiser Permanente. With CaliforniaChoice, you and they each can have what you want, including EPO options from Anthem or Cigna + Oscar.
With Defined Contribution from CaliforniaChoice, you can select a Fixed Percentage (50% to 100% of a specific plan and/or benefits) or a Fixed Dollar Amount contribution to coverage for each employee. If an employee selects coverage that costs more than you’re contributing, the employee simply pays the difference.
At renewal, you can adjust your contribution, up or down, giving you complete control over what you’re spending on employee benefits. You can even switch from Fixed Percentage to Fixed Dollar Amount, if that works better for your budget at renewal.
Plan Comparison Tool
If it’s important for employees and family members to be able to keep a preferred doctor when moving to a new health plan, they will want to compare the provider networks for the plans being considered.
Your employee benefits broker can help you search for doctors and prescriptions that are “in network” and covered by the health plan(s) you’re considering. Or, you and your employees can use a valuable online tool at the CalChoice website to compare plans, networks, and coverage.
A Broker Can Help You Shop
A great place to begin a comparison of health insurance options for your employees is by talking with an employee benefits broker. CaliforniaChoice works exclusively through brokers, who can discuss the available options in your area. Using a broker does not cost you anything. In fact, a broker may save you money because of their expertise in networks and plans in your specific area.
Talk with your employee benefits broker about a custom quote for your business. If you don’t already have a broker, you can search for one here.