Today there are more health plan options than ever before. You can have gatekeeper HMO's, Point of service HMO's, Preferred Provider Organizations PPO's, High Deductible Health Plans - Health Savings Accounts HSA's, Traditional Major Medical plans and various hybrids. As part of our insurance analysis, we will explore a wide array of options with you.

Some of the insurers we deal with on a regular basis are: Humana, Principal Mutual, Anthem of Colorado, Pacificare, Aetna, Guardian, United Health Care, Kaiser , Rocky Mountain Health Plans and Assurant.

If you are in the market for group insurance, you need to speak to us. We can provide you with critical information regarding current laws and plan choices.

Colorado Insurance Laws And Group Plans

There have been tremendous changes in health insurance laws in Colorado. For groups that have two or more employees, the insurance is guaranteed issue. This means that you can secure health insurance regardless of health conditions.

If you do not have prior group or individual medical coverage, you may have limited pre-existing exclusions. The HMO plans will cover pre-existing conditions from the first day of coverage, and the PPO and indemnity plans will cover pre-existing conditions after a six-month wait, if you did not have prior coverage. However, in no case will you be refused insurance if you comply with simple underwriting criteria.

If you had prior coverage for at least six months, and not more than a 63 day break in coverage between plans, your group can change to either a PPO or HMO plan with no pre-existing condition limitations. Most HMOs do not require that you have had prior coverage for pre-existing conditions to be covered immediately.

GROUP HEALTH PLANS

The business specialty of Preferred Insurance is group health plans. In Colorado small groups are defined as businesses with 2 to 50 employees. If your business has more than 51 employees, even if they are not enrolled under your health plan, your business is considered a large group employer. The laws that govern large group employers are different than small group employers, 2 to 50 employees.

GROUP INSURANCE REQUIREMENTS

There are two main requirements that insurers look for if you are going to have a group plan, they are participation percentage and contribution percentage.

Participation Percentage- most health insurers will require that at lest 75% of your eligible employees enroll for coverage. The key here is eligible. If you have many part time employees, and they are not deemed eligible to participate in your plan, you do not have to offer them health insurance. If you only offer your plan to managers and owners, then all other employees are not eligible and are not counted in the participation percentage. The employer defines who is eligible and offers the insurance plan to those who fall into the eligible class. The most important thing is to be consistent and uniform in how you offer your benefits.

Let's assume you run a software company and have 20 employees. The insurance plan you offer is available to all employees upon date of hire. If you have employees who are covered under their spouses plan, they can waive your offer of insurance and not be counted against your participation requirement. Also, if you have employees who are covered under military plans or through their parents, they do not have to enroll and will not be counted against your group. So let's assume four people have coverage through their spouses and that three have coverage as retired military. In total seven people will not take the insurance. We subtract the seven from twenty and get thirteen. You will need ten employees to enroll in order to meet the 75% participation percentage. If you have a hundred employees, and only twenty-five are eligible for the plan insurance, the participation percentage is calculated on the twenty-five employees who are eligible for the benefit. If none of the twenty-five employees waived coverage because they were covered through other sources, then the employer would need nineteen employees to enroll, even though he/she has a group of one hundred employees.

Contribution Percentage- Most group health plan require that an employer pay some portion of the employees health insurance premium. The industry standard is that the employer pay at least 50% of the single premium for the employee. For example, if the single premium for the employee is $100, then the employer will pay $50 of the employees insurance premium. If the employer wants to pay more, or wants to pay a portion of the employees' dependents costs, the employer may do so. For now, realize that the insurance company does require that the employer pay a portion of the single premium only.

The process of applying for a group health plan is quite simple. The employer needs to complete a group application and identify who is eligible for the insurance. Also, you will probably need to supply a copy of your quarterly unemployment wage and tax statement. This statement is usually requested because it indicates the actual number of employees you have on your payroll.

VARIETY OF PLANS THAT ARE AVAILABLE

There are a number of different plans that are available to both large and small employers. The plan types that are available are:

*Health Maintenance Organizations( HMOs)
*Preferred Provider Organizations( PPOs)
*Point of Service HMOs(POS)
*Indemnity Plans
*Exclusive Provider Organizations( EPOs) *Health Savings Accounts - High Deductible Health Plans

Health Maintenance Organizations (HMOs)

An HMO has two forms, gatekeeper and open access. Under a gatekeeper HMO, you must choose a primary care doctor from a published panel of doctors. If you need medical attention, you need to see your primary care doctor first. The primary care doctor will refer you to a specialist if you need one. If you want to see a doctor who is not part of the panel, and you do not have a referral, the visit will not be paid by your insurance.

Open Access HMO

Under an open access model HMO, you do not need to choose a primary care doctor. If you want to see a specialist first, without consulting a family doctor, you may. In fact, you can see any doctor within a defined panel without a referral. However, if you use doctors or hospitals that are not part of the contracted panel, the charges will not be paid. These types of HMO plans are growing in popularity because of the freedom they allow within the network.

Preferred Provider Organizations (PPOs)

A Preferred Provider Organization (PPO) offers more flexibility than an HMO. Under a PPO, you are offered two choices; you can use doctors and hospitals that are part of the PPO network or you can use doctors and hospitals that are not part of any network. If you use PPO Network providers, you will have a richer set of benefits because these doctors have been contracted and agree to discount their services. Also, most simple in network visits only require an office co-payment. If you use non-network providers, you will pay higher deductibles and pay higher out of packet maximums. However, the choice is left up to you. Also, under most PPOs, you do not need to choose a primary care doctor and you do not need referrals to see specialists. Because PPOs allow for a greater freedom of choice in selecting your medical providers, PPO premiums are generally more expensive than HMO premiums.

Point Of Service Plans (POS)

Point Of Services HMOs are growing in popularity. A point of Service HMO has some of the features of a gatekeeper HMO and a PPO combined into one plan. The basic plan is an HMO and you are required to pick a primary care doctor and get referrals to see a specialist. However, if you decide that you do not want to see any of the providers that are listed in the provider directory, you may go to any provider not listed in the directory at an additional cost. Usually, when you go out of network, you will have to pay a deductible and pay 30% of allowable charges over and above the deductible. However, if you wish to go to a particular doctor or hospital, and you do not want to go through gatekeeper referrals, you may do so at a higher out of pocket cost.

Indemnity Plans

Indemnity plans are the old traditional 80%/20% plans of the past. The advantage of the indemnity plan is that you can go to any doctor anywhere at any time. There is no panel of doctors from which to choose. These plans always have deductibles and coinsurance requirements and do not offer discount to providers. The major advantage of this type of plan is complete freedom in your choice of doctors and hospitals. The indemnity plan has the most expensive monthly premiums. People who like this type of plan value freedom of choice over richness of benefits.

Exclusive Provider Organizations (EPOs)

Exclusive Provider Organizations (EPOs) are a hybrid of PPO plans that have extreme financial penalties for using non-PPO providers. If you stick with the published list of PPO providers you receive rich HMO type benefits. However, if you decide you do not want to see PPO providers, you may see any provider but you will have to pay high out of pocket expenses if they are not part of the PPO network. This type of pan is similar to some Point of Service HMOs.

HIGH DEDUCTIBLE HEALTH PLANS - HEALTH SAVINGS ACCOUNTS

High deductible health plans(HDHP) and health savings accounts are combined together to create what is commonly called a health savings account. Under this style of health plan, you are allowed to put money into an interest-bearing account on a pre-tax basis, just like an IRA. Money is put into the account on a pre-tax basis and can be rolled over from year to year. For 2006 an individual can contribute up to $2700 on a pre-tax basis to an HSA. Families can contribute up to $5450 on a pre-tax basis

The money accumulated in an HSA should be used for paying the deductible amounts selected under the high deductible health plans. For example if your health plan has a $2000 deductible, and you are single, the $2000 that you accumulate in your HSA should be used to pay your plan deductible (High Deductible Health Plans do not have fixed co-payments or prescription co-pays. No benefits are paid until the entire deductible is satisfied.) Under a health savings account style of insurance, the individual or family MUST satisfy the entire deductible before the insurance plan pays any benefits.

If a family has a HDHP plan, two deductibles must be satisfied before the insurance pays ANY claims. However, one family member, or any combination of family members can satisfy the full family deductible. For example, if you purchase a HDHP that has an individual deductible of $2000, the deductible for the family will be $4000 (twice the single deductible). In the family, one member, or a combination of family members can meet the $4000 deductible.

The savings account can be funded on a monthly, quarterly, or yearly basis. However, the account CANNOT be over funded. For example if you start an HSA in june, you can only fund 50% (6/12 of a year) of the maximum allowed HSA contribution for the year. If you start the HSA in September, you can only fund 25%(9/12 of a year) of the annual maximum allowable contribution.

When you reach 65, HSA funds can be withdrawn without penalty, however, you will have to pay normal taxes. HSA's will grow in popularity over time. The major reason for their popularity is cost and flexibility in the medical items that can be purchased with HSA funds. Healthy individuals and families may find that they have more discretion in how they use their funds from an HSA.

GROUP DENTAL

Just as there is great variety with health plans, there is also variety with group dental plans. Dental plans also have their versions of HMOs and PPOs. The dental HMO is known as a DMO (Dental Maintenance Organization) and the dental PPO is known as the dental DPO (Dental Preferred Provider Organization). Under the DMO and DPO, you need to choose from a network of plan providers in order to receive the richest benefits.

Dental Maintenance Organization (DMO)

Under a Dental Maintenance Organization (DMO), you usually need to choose from a list of dentists. In order to receive any benefits at all, you must see providers that are on the list. If you choose to see providers who are not part of the provider directory, your services will not be covered. The DMO is generally very restrictive in the area of choice of dentists. However, the major advantage of the DMO is that it usually provides a very rich set of benefits. In many cases the DMO does not have an annual limit in dental services. DMOs usually require that you pay a certain dollar amount for procedures that are performed under the plan. Most of the time, these procedures will cost considerably less than the normal non -DMO charge.

The major advantage of the DMO is that it will cover major services, like crowns and root canals, day one with no waiting periods. Most dental plans will not cover major services day one unless you had prior coverage under a group plan. DMOs are ideal for young families who do not have an established dentist and who need a lot of dental work done immediately. Also, DMOs are very affordable and generally cost less than most traditional dental plans.

Dental Preferred Provider Organization (DPO or PPO)

Dental PPOs have network and non-network benefits. If you choose to use network dentists, the dentist usually provides some form of discounts and will usually agree not to balance bill for services that exceed the norm for charges in the area. If you choose a dentist that is not part of a directory, you will usually pay more for services and you will be balanced billed for charges that were not paid by the dental plan.

The PPO offers you the choice of either using plan providers or any other dentist. Generally you will have a lower deductible with a PPO if you stick with plan providers. The dental PPO usually has a $1000 to $1500 annual benefit maximum per family member and usually has a one year waiting period for major services like crowns and root canals.

Indemnity Dental (traditional)

Indemnity Dental is known as traditional dental. Under a traditional dental plan you can choose any dentist you wish. These plans usually have a $1000 to $1500 annual maximum benefit per family member and have waiting periods for major services. Traditional dental plans are usually the most expensive of all dental plans and dentists commonly balance bill for charges that are not paid by the dental insurer. People who have long standing relationships with their dentists and whose dentists are not members of DMOs and PPOs favor traditional plans.

For more information about Health Saving Accounts please click here to email us or call us at (719) 599-7989.