What is the multiple plans option?
Q: What is the multiple plans option?
A: It was not to long ago that a small business employer had to choose a single health plan that met the needs of all of its employees. Every employee with the company was on the exact same health plan, whether it was an HMO, PPO or indemnity type plan. The rising cost of health insurance, along with reductions in employer contributions, has forced insurance companies and employers to provide more options to their employees. Perhaps some employees want an HMO that provides comprehensive coverage, full hospitalization and small office visit co-payments. Other employees may want the freedom to choose their own doctors and are willing to accept a higher deductible and share of cost in exchange for a lower monthly premium. Although the type of coverage available has always been of concern to employees, it was less of a concern when the employer was paying for 100% of the employee’s premium. With this becoming less common, employees demand more choices, especially if they are paying as much as 50% of the premium amount, and probably 100% of the premium for their dependents.
Most all insurance companies now offer multiple plan option packages to small groups looking for employer-sponsored health insurance options. These multiple plan packages allow the employee to choose from a variety of health plan options with the same insurance company. Choices may range from high-deductible HSA plans to comprehensive HMO plans. This is ideal for an employer that has employees with different health care needs or that have limits on the amount they can contribute toward their premium. The size of the group may influence the multiple options that are available to that group through the insurance carrier. For instance, a group of 5 or less may only be able to select from one HMO and one PPO plan, while larger groups may be able to choose from 3 or more plans.
When an employer elects to offer multiple plan choices to their employees, the actual employer contribution may be less as a result. For example, if an employer has a required contribution of 50% (as determined by state regulation or insurance company guidelines), he may only be required to pay 50% of the premium for the lowest priced plan available among the multiple plan choices. If an employee chooses a more expensive plan, they would voluntarily “upgrade” their coverage at their own expense, becoming responsible for the difference in premium between the lower cost plan and the more expensive plan. An employer may customize his contribution as long as it stays within state health insurance regulations.
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