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Employer Health Insurance Options

Most Americans participate in employer-based health insurance programs. Large employers usually offer its employees a choice of many health insurance options, while smaller employers might only offer one option for employees. When considering employer health insurance options, employees should take into account the out of pocket costs, which doctors and facilities they can use and the level of coverage provided by the plan.

  1. PPOs

    • The option to choose a preferred physician or facility attracts a majority of employees to employer health insurance programs called Preferred Provider Organizations (PPO). According to KaiserHealthNews.org, nearly 60 percent of Americans who have employer health insurance choose the PPO option. Employees selecting the PPO health insurance option can receive services from any doctor or facility of choice, but receive a discount for selecting one in the network of the PPO plan.

    HMOs

    • Many employers offer participation in Health Maintenance Organizations (HMO) to its employees. KaiserHealthNews.org reports that 20 percent of Americans have this type of employer-based health insurance. HMOs require participants to select physicians and facilities from a predetermined list of providers. HMOs negotiate lower costs for participants, but require participants to obtain referrals from primary care physicians in order to receive specialty care or services.

    Self-Funded Plans

    • Some employers offer a self-funded health insurance option to employees. These are most often offered by large corporations that either fully or partially selfinsure its group health insurance. Because the plan is administered by the employer, costs are lower for both the employer and the employee compared to HMO or PPO options. The employer retains control over the coverage offered to employees; however, the employer also assumes a higher level of risk with this type of plan.

    High Deductible Plans

    • High deductible plans cost the employee and employer less each month for coverage compared to HMO or PPO options, as the cost is passed on to the employee in the form of a several thousand dollar deductible. The employee must pay for all care until the deductible is met. These plans are often combined with health care savings accounts and sometimes the employer contributes to the health savings account. These plans also usually cap the number of doctor's visits as well as the amount of lifetime coverage.

    COBRA

    • When an employee leaves a job or is laid off or fired, he retains the right to continue participation in his employer based health insurance through the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). COBRA requires the former employee to pay the full amount of the premium of the health insurance rather than just the employee share. In return, the employee gets the same level of coverage and services as he did when he was employed. Employees can participate in COBRA health insurance options for up to 18 months after leaving a job.

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