Catastrophic health insurance can be an essential tool for the small business world. While larger businesses can often afford to offer group health insurance, smaller businesses may find it difficult to pay the premiums on regular insurance policies every month. This is where catastrophic health insurance can come in very handy.
Brief Introduction to Catastrophic Health Insurance
Catastrophic health insurance is a type of insurance that can cover most of the medical costs that occur during a medical emergency. Premium payments are due every month and an annual deductible is involved. If an emergency situation occurs, the insured will pay the deductible only. The rest will be covered by the insurance.
This type of health insurance is available for many different people, but works best for those who are usually healthy and just want a little bit of coverage in case something goes wrong.
Why Catastrophic Health Insurance Is Good For Small Businesses
Not every small business hits the ground running. Some take time to develop, and some don’t ever become big businesses. Typically, these businesses don’t have a lot of extra money lying around and only employ a few individuals.
With typical group health insurance, the employer usually pays up to fifty percent of the insurance premiums every month, while the employee is responsible for the rest. Small businesses that do not have a lot of operating money can still offer their employees emergency medical insurance by opting for a catastrophic health insurance plan. This is due to the fact that premiums are generally low (depending on the deductible you choose).
Small business must compete with larger business to gain and keep employees. Offering health benefits, even in the form of emergency coverage, is an important part of maintaining employee satisfaction. Offering medical insurance will make your business more attractive to new hires and help to retain the staff you are currently working with.
How Much Will the Employees Have to Pay Out of Pocket if an Emergency Situation Occurs?
Catastrophic health insurance has low premiums, but what will your employees have to pay if they have to go to the hospital?
The majority of the time, normal doctor’s visits and prescriptions will need to be purchased with cash from your employees own pocket until the annual deductible is met. Depending on the type of catastrophic health insurance plan you choose, once the deductible is satisfied, your employees doctor and specialist visits may be covered. If an emergency occurs which requires your employee to go the hospital, anything above the deductible will be covered by the insurance. Normally these deductibles are between $500 and $1500 annually.
This type of health insurance does not usually cover pre-existing conditions and psychological conditions. Pregnancy is also something that is not usually covered by catastrophic health insurance. Again, depending on the plan you choose, certain riders can be purchased to expand the coverage.
Catastrophic health insurance can be a helpful solution to small businesses that don’t have the financial resources to provide regular group health insurance to their employees. Although this type of insurance does not cover all of your employees basic medical needs, it will help them during an emergency. If your employees can afford to pay for their own doctor’s visits and prescriptions but still need coverage in case something unexpected happens, catastrophic health insurance may be the right choice for your business.
Before deciding on any catastrophic health insurance plan, get a few quotes to compare coverage, deductibles, and any rules or stipulations that apply.