For small business owners, health insurance, even catastrophic health insurance, can be the most expensive part of owning a business. Purchasing an insurance policy for your employees though is an important step in creating unity and trust in the company. A good insurance plan also attracts dedicated, hard-working employees. If you are thinking about insurance for your workers, here is some information you should know along with the option of catastrophic health insurance plans.
How Catastrophic Health Insurance Stacks Up Against the Others
As an employer of a small business, you may not be required by law to provide your employees with health insurance, but that does not mean it is not needed. Here are a few different plans that you might want to consider.
- Indemnity Plans- These major medical plans are often offered by small businesses. They feature a deductible and once the deductible has been completely paid, a reasonable percentage of an individual’s medical bills will be covered. Most of the time, this percentage is about 80 percent. The employee will be responsible for the other 20 percent of the bill.
- Preferred Provider Organization (PPO) Plan- With these plans, your business would sign a contract with local doctors and hospitals. When your employees are sick, they may visit the doctors and hospitals in the plan for discounted health care. If they decide to visit a physician outside of the plan, they will have to pay a higher fee for their medical care.
- Health Maintenance Organization (HMO) Plan- With this type of health insurance, your employees will be able to pick one of the many doctors available on your network list. They will then receive all of their health care needs from this specific doctor. If they must see a specialist, the doctor they have chosen must refer them. They will not be eligible for insurance coverage if they see another doctor outside of the network without a referral from their primary physician.
Catastrophic Health Insurance and Small Businesses
While these insurance plans may provide the necessary coverage your employees need for their health, they are generally expensive and may take a big chunk out of your pocketbook. For this reason, you may want to consider catastrophic health insurance. With this insurance, your employees will be covered in the event of an emergency and your premiums will be much lower.
Catastrophic health insurance has a high deductible, which must be paid before the insurance will cover any medical problems. While, by itself, it only protects against catastrophic events, if specialized riders are added to the catastrophic health insurance plan, your employees may be able to obtain coverage for doctor’s visits, prescriptions, and maternity care.
Catastrophic health insurance can also be provided with a health savings account (HSA). These accounts are not insurance, but a way for your employees to save their money to pay for the portion of their medical bills catastrophic health insurance does not cover. Because the monthly premium for catastrophic health insurance is so low, your employees can easily add the extra money they would have spent on a full coverage health plan to their HSA account. This will allow them to save and pay for their health care themselves.
If you are considering an insurance plan for your employees, you may want to choose catastrophic health insurance.