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Insurance benefits management is a complex task that involves more elements with your group medical coverage being just one of them. The first step you should take is deciding who will be responsible for managing medical benefits in your enterprise: an old employee or a separately hired person. In order to make up your mind on that matter, here are some factors to consider when evaluating all of the possible ways:

General administration. Any of the plans you choose to employ should comply with the functional requirements submitted by the Internal Revenue Service, and should deliver the required information on time both to the policy owner and the insurer. The person responsible for benefits management will be working with your insurance company’s agent or broker, as well as make monthly, quarterly and annual reports to the IRS and the Pension Benefit Guaranty Corporation. Read the rest of this entry »

Small business owners are constantly looking for ways to cut their costs and when it comes to insuring own employees there are certain alternatives to traditional group plans that may be quite costly for small enterprises. The two most common alternatives are purchasing alliances and association plans. The first are generally nonprofit organizations with private ownership that connect more small enterprises for purchasing group plans as a whole.

The concept behind this is quite obvious: the more the better. Because there are many people involved in insurance purchasing pools they usually have better rates and stronger negotiation abilities. There are pools allowing individuals to join, however in most cases they serve only small enterprises with 2 to 50 workers. Such pools have more attractive rates and premiums for their members if compared to typical group plans because the total number of underwriters can sometimes be of a big international corporation. So yes, size does matter.

Insurance purchasing alliances usually involve three parties:

1. Alliance company. Purchasing alliances are usually private companies by the form of ownership, which acts in the interest of smaller enterprises participating in the pool. The company is responsible for rules and regulations, requirements for new members and their eligibility. It is also the party responsible for negotiation the rates and premiums with the insurance provider. Quite often a local state agency or chamber of commerce works as an alliance company.

2. Health insurance providers. The alliance companies contact insurance companies for providing their members with coverage. Sometimes the company will contact several insurance providers to offer their pool members wider selection of plans and better coverage rates. Quite often you can find HMOs, PPOs, and POSs with the same alliance company but provided by numerous insurers. Read the rest of this entry »

There is something deeply annoying when people in a particular trade or industry start using jargon and letters to talk to us. What is wrong with the English language? Why must they hide the meaning? Why do they believe we will be impressed? The insurance industry is one of the worst offenders. By the time the experts have finished describing the different health plans and the lawyers have wrapped everything in obscurity, we seem left with a take-it-or-leave it choice. They seem to be saying, “close your eyes, trust everyone has your interests to heart, and pick something out of the alphabet soup.” Well here is a quick tour through two of the most common plans to help you decide.

The essence of all plans is a definition of the healthcare professionals available to deliver the care should you need it. The wider the choice you have, the higher the premiums you will be required to pay. With a Health Maintenance Organization (HMO), a group of healthcare providers contracts with an insurance company to deliver services to the policy holders. Because the insurance company guarantees a high volume of business to the group, the rate for the services is lower than usual and so the premium rates charged and copayments are also lower. Access to the services is controlled by a primary care physician. He or she will refer you on to other members of the group for different specialist services. If you want to go outside the group, you will have to pay the difference between the HMO rate and the actual cost of your own choice doctor. Although this is the cheapest form of plan, the lowness of the fees charged by the group encourages members to see as many patients as possible every day.

A Preferred Provider Organization (PPO) also contracts with an insurance company, but the relationship is less restrictive and the rates are slightly higher. In this plan, you are free to choose any doctor within the group without having to get a referral. If you decide to see someone outside the group, you will have to pay the out-of-pocket expenses. Here, you are paying slightly more to have more control over your treatment options. So, for example, if your own doctor is not a member of an HMO, you would have to change. With a PPO, you can continue to see your own doctor. Read the rest of this entry »