All entrepreneurs with employees encounter a wide range of start-up costs and ongoing expenses, no matter what industries they work in. Often, it is these expenses, not a lack of hard work or strong sales, that can sink the business. Finding affordably priced protective health insurance for small business owners can be tricky, but it’s essential to controlling the overhead costs that can make or break a business in the marketplace.
Three of the most common types of plans for small business are HMOs, PPOs and POSs. Many of the smallest companies have found that one of these plans can affordably suit everyone’s needs, but there are drawbacks and limitations to all three.
HMOs are usually the most affordable option, but they have gained an unfavorable reputation as an option for protective health insurance for small business owners. The reason that many employees don’t like HMOs is because every insured worker’s caregiver must be chosen from a list of network physicians, which can force employees to give up their trusted doctors. It can also lead to lengthy waiting lists for appointments, depending on the size of the network and the number of its insured patients. Before choosing an HMO plan, small business owners should carefully investigate the specific rules and conditions of choosing primary care physicians. For instance, some of the least flexible HMO plans require patients to stay with the primary physician that they initially choose. It’s important to make sure that employees can at least have some freedom, even if it is only freedom of choice from within the network.
While the premiums and co-pay costs of an HMO are typically among the lowest, some business owners choose the higher-cost PPO plans to allow more freedom of choice. These plans also use a network of physicians, but patients can elect to receive non-network care if they’re willing to pay larger deductibles, co-pays and coinsurance. POS plans are a popular hybrid of HMOs and PPOs; these policies have low network health care costs comparable to that of an HMO, but still allow non-network care like a PPO.
Business owners should determine what plan will work best by first developing a good estimate of their maximum health care annual budget, and then conducting additional research on costs for all of these plan types. To get the best assurance of a wise decision, owners should seek out the assistance of an independent insurance agent who has experience insuring similar businesses.
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