New Job, New Benefits: Choosing a Health Plan

Currently, the United States operates under what is called an employer driven health insurance system. This means that most people who have a full-time job with benefits get their health insurance from an employer-provided health insurance plan.

Most employers offer some choice in plans. Plans that are usually the least expensive are HMO plans. They are also the most restrictive in choice of physicians, when you can see a specialist and what hospital you may use. Not all physicians participate in HMO plans. Typically, once you choose a HMO plan you will be assigned a primary care physician, commonly referred to as a PCP. Most HMO plans encourage you to see you your PCP as soon as possible. On your first visit you will usually receive a complete physical exam. You can only visit a specialist with a referral from a PCP. Often, certain medical conditions will be treated by the PCP such as diabetes, depression and other chronic diseases. Only if the PCP cannot control your disease will a referral to a specialist be given. HMO is the acronym for Health Maintenance Organization. As the name implies, the emphasis of their health care preventative health. The unspoken message though is that they are very cost conscious, encourage PCPs to handle as much of a patients health care needs as possible. The people managing the plan frown on unnecessary testing. Certain tests and treatments can not be ordered without "prior authorization" thus there is a bureaucratic layer between physician and patient when it comes to choice of treatment and testing. HMO plans are a good choice for younger people who do not have many health issues. Also, some HMO plans offer special treatments for certain common chronic diseases such as diabetic care. If you have a chronic illness that has team coverage (physician, specialist, nutritionist, counseling) a HMO may be right for you.

Another popular health insurance model that employers offers as part of their benefits package when you start your job is called a Preferred Provider Organization. Usually, a PPO has a wider selection of physicians on its provider lists and allows you to select your primary care physician. PPO plans often allow you to see a specialist without a referral. The negative thing about PPOs is that if you use an out of network health care provider or facility, the amount you pay as the co-pay is likely to be very high. Some plans may not cover out of network providers at all. PPOs usually have a larger pool of providers on their list. If you have been seeing the same doctor and do not want to switch check to see if your physician participates in PPO offered by your new employer.

The last option that may be offered by some employer is called an indemnity plan. You can choose any doctor, facility, or lab that you like. They will pay the doctor a fixed percentage of the fee and you are responsible for the rest. Very few employers offer this option as it is incredibly expensive. Your portion of the premium will be expensive as will the portion of the bills that are your responsibility. Freedom of choice has an expensive price tag.

Good health plans offer accessibility. This means they have a large number of physicians participating in their plan.

Premiums for each type of plan varies, most employers now expect employees to pay a portion of the premium through payroll deduction as well as co-pays. When you begin your job, go over the benefits with a member of the human resources department. They can explain what the costs and coverages of each plan are. Older employees may find that Medicare is their primary insurance and the employer plan is their secondary plan, often known as a Medi-gap policy. A member of the human resources team can help you sort this out.

Employers only allow you to switch plans once each year during "open enrollment." Generally, people who do not have health issues are satisfied with HMO plans as they have the lowest premium and co-pays. The HMO trade-off is a more restrictive panel of physicians and facilities and the need for prior authorization for certain drugs, tests and treatments.

PPOs have larger networks so choice of physician is less restricted. Within the network of participating physicians you can see whomever you choose. Certain procedures and drugs may require prior approval but this category is far more limited than a HMO. Your portion of the policy premium is generally more expensive than if your enroll in a HMO. Employees who are forty or older, with children generally select the PPO option. Co-pays are more expensive than a HMO.

Indemnity insurance allows the job holder virtually unlimited choice. Premiums are higher than any other plan. There are few, if any restrictions on providers.