Medical / Health Insurance

The Medical insurance industry is continually evolving. We have seen many cycles of healthcare trends. Our healthcare experts can help you select or design a plan to fit your needs.

Group Health Insurance: Group Insurance health plans provide coverage to a group of members, usually comprised of company employees or members of an organization. Group health members usually receive insurance at a reduced cost because the insurer’s risk is spread across a group of policyholders.

Health insurance is a type of insurance coverage that pays for medical, surgical, prescription and sometimes dental expenses incurred by the insured.  Health insurance can reimburse the insured for expenses incurred from illness or injury or pay the care provider directly.  It is often included in employer benefit packages as a means of enticing quality employees, with premiums partially covered by the employer, but also deducted from employee paychecks.

How Group Health Insurance Works: Group health insurance plans are purchased by companies and organizations, and then offered to its members or employees. Plans can only be purchased by groups, which means individuals cannot purchase coverage through these plans. Plans usually require a minimum participation rate of about 70% in the plan to be valid. Because of the many differences—insurers, plan types, costs, and terms and conditions—between plans, no two are ever the same.Group plans cannot be purchased by individuals.

Once the organization chooses a plan, group members are given the option to accept or decline coverage. In certain areas, plans may come in tiers, where insured parties have the option of taking basic coverage or advanced insurance with add-ons. The premiums are split between the organization and its members based on the plan. Health insurance coverage may also be extended to the immediate family and/or other dependents of group members for an extra cost.

The cost of group health insurance is usually much lower than individual plans because the risk is spread across a higher number of people. Simply put, this type of insurance is cheaper and more affordable than individual plans available on the market because there are more people who buy into the plan.

Managed Care Plans: Managed care insurance plans require policyholders to receive care from a network of designated providers for the highest level of coverage.If patients seek care outside the network, they will typically pay a higher percentage of the cost or in some instances the entire amount due. Health insurance plans can have co-pays, which set fees that the subscriber must pay for services. There can also be deductibles for certain services where the insurance company does not pay for the charges until the deductible is met and Co-insurance which is a percentage of healthcare costs that the insured may have to pay after the deductible is met.  Plans also usually have an out-of-pocket maximum, which when reached, the insured will be covered at 100% for the remainder of the plan or calendar year.

Below is a summary description outline of some of the more popular plan design types in today’s market.

Health Maintenance Organization (HMO):  A health maintenance organization (HMO) is a health service organization that offers medical services to members from a network of providers under contract. Because the contract directs a steady stream of patients to the providers, this usually results in lower premiums; however, HMOs place certain restrictions on its members. Members can only receive services outside of the HMO network through a referral from a primary care physician (PCP), or if they pay out of pocket.

Typically, HMOs require members to choose a PCP who directs access to the necessary medical services. A PCP will not issue a referral unless it meets the HMO guidelines. However, other combined health insurance products, such as open access or point of service, may offer more freedom outside the approved provider network.

Moreover, HMOs often provide preventative services, such as physicals and immunizations, for free to lower the likelihood of the members developing preventable conditions that would later require various medical services and increases costs for the HMO.

Preferred Provider Organization (PPO): A preferred provider organization (PPO) is

a medical care arrangement in which medical professionals and facilities provide services to subscribed clients at reduced rates. PPO medical and healthcare providers are called preferred providers.

  • PPO medical and healthcare providers are called preferred providers.
  • Choosing between a PPO and an HMO generally involves weighing one’s desire for greater accessibility to doctors and services versus the cost of the plan.
  • PPO plans are more comprehensive in their coverage and offer a wider range of providers than HMO plans,but comes at a higher cost.

Point-of-Service (POS):  POS plans offer both in and out-of network coverage. Like an EPO, the out-of-pocket cost while using an in-network provider will be much lower than using an out-of-network provider as all services and providers have negotiated fees.

Out-of-network services are typically reimbursed at a specific coinsurance level (typically 70% to 80% or 150% of Medicare) after satisfying a deductible. Maximum allowable charges for out-of-network services are limited to a specific percentile of “reasonable & customary” charges or as a percentage of Medicare allowable charges.


Exclusive Provider Organizations (EPO): An exclusive provider organization (EPO) is a network of healthcare providers whose services are covered by a healthcare plan that will not provide any coverage for medical care outside the network.Exclusive provider organizations are made up of hospitals, laboratories, clinics, and medical professionals. If a person wants to enroll in its health plan, they can only avail themselves of the facilities and professionals that are part of the network. They will receive no financial assistance for services outside the network and will have to pay out of pocket for treatment.

High-Deductible Health Plan (HDHP): These plans have a “high deductible” that members must satisfy before the insurance coverage begins. A deductible is the portion of an insurance claim that the insured pays out of pocket. Once an individual has paid that portion of a claim, the insurance company will cover the other portion, as specified in the contract. An HDHP usually has a higher annual deductible than a typical health plan, and its minimum deductible varies by year.

Services like office visits, prescriptions, hospitalizations all initially accumulate towards the plan’s deductible. Once the deductible has been met, these plans then behaves like traditional medical programs. It is important to note that preventive care is covered at 100% immediately. HDHP usually overage comes with an annual catastrophic limit on out-of-pocket expenses for covered services from in-network providers. Once you have reached this limit, your plan will pay 100% of your expenses for in-network care. If you’re interested in taking this route, it’s important to understand how HDHPs work and how having one will change how you pay for healthcare. Give us a call we can help!

High Deductible Health Plans are not for everyone and require proper planning, and implementation. Employee education is crucial when setting up these plan designs. That’s what we come in. Contact us to see if a High Deductible Plan Design is right for your group.

Health Savings Account (HSA’s): A health savings account (HSA) is an account set up for individuals covered under a high-deductible health plan (HDHP). Intended to help pay for medical expenses not covered by the latter, it also offers three tax advantages: deposits are tax deductible, interest earned is tax-free, and withdrawals are also tax-free, provided they are put toward qualified medical expenses.

An HSA is one of the ways an individual can cut costs if faced with high deductibles. As long as withdrawals from an HSA are used to pay for qualified medical expenses that are not covered under the HDHP, the amount withdrawn will not be taxed. Qualified medical expenses include: deductibles, dental services, vision care, prescription drugs, copays, psychiatric treatments, and other qualified medical expenses not covered by a health insurance plan.

The HSA is the employee’s personal account. To qualify for an HSA, an individual must have a HDHP and must not be listed as a dependent on another person’s tax return or enrolled in Medicare. You or your employer make contributions, which have a maximum annual limit, and the contributions are then invested. Any funds in the account whether they are deposited by the employee or employer always belong to the employee even if they leave the company.

Have you explored Self-Insuring your plan? 

Self-Insurance Options for Employers: Insurance companies are now beginning to introduce self-funded plans. Also called Fixed-funded or Level-funded plans, these products have all the components of self-funding bundled together to create a turn-key solution for small and large employers.

These plans typically include set monthly costs to protect against swings in claim costs,and should state clearly what your maximum costs could be. This innovative products act and feel like a fully-insured plan, but allow you the opportunity to save money when your claims run well.One of the biggest challenges we face when determining whether this type of plan is right for you is the method in which these plans are written.

Unlike the fully insured guaranteed issued plans many companies have become accustomed to, Level-Funded plans rely on your company’s employees completing medical questionnaires that once underwritten determine if your group meets the carrier’s requirements. We have a solution that makes this process painless to the employer!

  • We can help you determine if self-funding makes sense for you.
  • Help you choose the appropriate components of your plan design.
  • Help you fully understand all risks associated with this type of plan design.
  • Help you understand the carrier’s underwriting philosophy and processes.

Multiple Employer Welfare Arrangement (MEWA): Also described as a “multiple employer trust (MET),” A multiple employer welfare arrangement happens when a group of employers combines their contributions in a self-contributing benefits plan for the benefit of their employees.

For the arrangement to work, the employers must make contributions to the plan based on the number of employees they each have and the estimated costs associated with each employee. MEWAs are a way for smaller companies to offer employee benefits outside of the government-run health insurance exchanges by sharing risk. They became popular as a result of the Patient Protection Affordable Care Act (ACA).

How a Multiple Employer Welfare Arrangement (MEWA) Works: Overall, a multiple employer welfare arrangement is a good way for smaller employers to get group health and other insurance benefits for their employers. By pooling their contributions together, these smaller employers are better positioned to offer the best benefits packages from insurance companies due to economies of scale.

Also, since each employer is a partner in a MEWA, they have the ability to suggest plan changes, giving them more power over what they can offer employees than when they go it alone.

Special Considerations: There are some financial considerations and challenges that need to be taken into account when an employer is thinking of participating in a MEWA. In some cases, multiple employer welfare arrangements find themselves unable to pay claims as a result of inadequate funding or reserves. In more extreme cases, due to poor management or outright fraud and embezzlement, some MEWAs have seen their funds drained altogether.As such, most MEWA administrators and participants often purchase stop-loss insurance to limit their liability. Such insurance covers errors and omissions, fidelity bonds, directors and officers, crime, cyber liability, and more.

Professional Employer Organization (PEO): A professional employer organization (PEO) is a firm that provides a service under which an employer can outsource employee management tasks, such as: employee benefits payroll and workers’ compensation, recruiting, risk/safety management, and training and development. The PEO does this by hiring a client company’s employees, thus becoming their employer of record for tax purposes and insurance purposes. This practice is known as joint employment or co-employment.

Private Exchange: A private exchange is an online benefits marketplace where employers purchase benefits using funding contributed by the employers. Employers set an amount of money for their employees’ benefits and employees choose the benefits that make sense for their unique needs. Transparent pricing lets employees see the true cost of benefits.

Some of the advantages to a private exchange include:

For Employers:

  • Enhance employee benefits experience
  • Streamline administrative tasks
  • Gain cost control and predictability
  • Showcase the intrinsic value of each benefit

For Employees:

  • Find the plans that best fit their unique needs
  • Select the products and benefits that best fit their unique needs
  • Exercise control over selected benefits costs
  • Better Understand the value of their benefits