Group insurance is one of the biggest concerns in a company. A perfect group health insurance is an often looked upon aspect. Finding the right group insurance for your employees is tedious until you grasp the right information about the different types of group healthcare insurance. You can choose a suitable health insurance group depending on the employee’s needs and categories. Generally, the group health insurance includes facilities such as:
- Ambulance charges
- Maternity cover
- Charges for pre-existing diseases
- Day-care expenses
- Room rent and nursing charges
However, the facilities covered under the group insurance are subject to employees’ age, salary, etc. The different types of group health insurance plans are: ?
- Fully Insured Plans
- Self-Funded Plans
- Level-Funded Plans
- Preferred Provider Organisation (PPO) Plans
Traditionally, the Fully Insured Plans and Self-Funded Plans are used and are therefore essential types of group health insurance plans.
Fully Insured Plans ✔
Fully insured plans are a group health insurance plan where the company covers the medical claims and plans in collaboration with the employer who pays a fixed premium. The premium that the employer pays is annually fixed. The premium rates are fixed based on the number of employees enrolled in the group health care plan and changes with the number of employees in the group. The fully insured plans are generally referred to as the traditional insurance plans. The employees must pay their co-pays and deductibles for the facilities, which are included under the plan.
The fully insured plans will save your money in the long run but are expensive and rigid. The plans cannot be changed, as they cannot be altered or customised. The advantages of fully insured plans are as follows: ➕
- Offering a fully insured plan as a group healthcare plan will ensure safety and are predictable in terms of security to your employees.
- In the case of a fully insured plan, the administrative duties and expenses are cut down, unlike the other group healthcare plans.
- A fully insured plan is risk-free, as there is a minimum involvement of employees with the insurance companies. As the employers are dealing with the insurance companies, the burden and responsibilities on the employees are generally not present.
- Employers often go for fully insured plans in group health care plans for their employees. There is a limited budget, and there are no extra expenditures for the company unless the number of members in the group change under the group insurance plan.
Self-Insured Plans ?
Self-insured or self-funded plans are group healthcare plans in which an employer bears all the risks and responsibilities in assuming financial risks for providing healthcare benefits to the employees. Self-insured plans will give you the autonomy in framing the group health care plan, which you might find suitable for your employers. You will be the one calculating the fixed and variable costs for the plan, such as stop-loss premiums, general administrative fees, administrative software fees, management fees, etc.
The self-insured plans are more flexible and more preferred, in general under the group health care insurances. They are less-regulated as compared to the fully-insured plans. This gives you the freedom to design the plan according to your employees’ needs and your company’s budget. Although self-funded plans are riskier in terms of financial loss due to operation inefficiency, fraud, extraordinary claims, here are some advantages that they offer: ?
- The employer has greater autonomy in controlling the insurance plan. The employers have the sole authority in organising, selecting, monitoring the group healthcare plans.
- Self-insured plans can be customised, unlike the fully-insured plans, which are rigid.
- It is more economical, as no premium taxes (levied by the state) and no profit or risk margins are involved. The employer can also retain funds and control the cash flow without external interference.
- The self-insured plans are mostly preferred when it comes to group health care plans as it is easier to access data on health care trends usage.
- The self-insured plans are not subject to any state insurance laws or mandates.
Therefore, self-insured plans are easier to handle, and the risks can be mitigated through stop-loss insurance, thus making it a highly reliable group medical health care plan.
Level-Funded Plans
Level Funded plans or partially self-funded plans are corporate healthcare plans which are self-funded plans with monthly cash flow stabilisation. In level-funded projects, the employers pay a monthly amount that is fixed. If the claims are low, the employers will return the money. However, the medical healthcare insurance carrier will cover the extra loss through stop-loss insurance if the claims are high. ?
Level-funded plans are more budget-oriented than self-funded plans as the expenditure can be estimated, unexpected high fees can be avoided, and the medical healthcare budget can be predicted more accurately. They are flexible, can be used in start-ups and small businesses, and give more options to employers for deciding suitable corporate health insurance. The other benefits of level-funded plans are:
- The top-level-funded insurers offer dedicated customer service representatives who will attend to you and your employees any time which will make your work easier and avoid the involvement of a third-party broker or an agent.
- Few level-funded insurers offer tools and digital applications for managing health benefits under group medical healthcare plans.
- A level-funded insurance plan involves efficient data management as the employers will have access to the data plans.
- Level funded insurance plans are widely used in small businesses and enterprises as the ACA offers tax credits for companies with less than 2-49 employees.
There are other corporate health insurance plans, such as Health Maintenance Organisation (MHO), in which group members pay for specific health services based on monthly premiums. Similarly, there is also a Preferred Provider Organisation Plan, another type of medical healthcare insurance plan similar to MHO but is more flexible. Having proper clarity and awareness about group medical health insurance is the key to choosing the perfect corporate healthcare insurance for your employees. ?