Group
Health
Group
Health insurance can take many forms. Each one has its pros and
cons. Which one makes sense for your credit union? The answer
is… it depends. Below, we have provided a brief outline of
the basics. However, we’ll look at each option and help you decide
which option makes most sense for your credit union.
The Plans...
HMO
The most common plan. HMOs most often do not allow for out-of-network
benefits. Each employee (and family member) must select a Primary
Care Physician (PCP) from the network of doctors offered by the
provider. Hospital care must be accessed at a facility that is
also part of the insurance carrier’s network.
POS
A POS is similar in almost every way to an HMO, with the exception
that a POS does have a provision that allows the participant to
go to an out-of-network provider. Out-of-network services are
more expensive for the participant. In general, a POS plan will
be more expensive than an HMO.
PPO
PPOs are the fastest growing type of health plan. With a PPO,
there is no PCP. Instead, participants are allowed to work within
the network of doctors and hospitals without restriction. A PPO
will also have provisions for out-of-network benefits.
Indemnity
Typically the most expensive option, indemnity plans have no network
of doctors or hospitals. The plan may require the participant
to pay a stated deductible and coinsurance before
benefits are covered in full.
Self-funded
With fully-funded health plans (traditional HMOs, etc.), the insurance
carrier is solely responsible for the payment of all claims. With
a self-funded plan, the credit union pays for the claims for all
of the participants in its' group health plan with its' own funds.
The credit union would purchase stop loss insurance to provide
protection against larger than expected losses. The plan provides
the utmost in flexibility, but carries the greatest risk…
especially for smaller employers.
Defined
Contribution Plans
The
emerging trend in healthcare is based around a plan that is partially
self-funded. These plans are called "Defined Contribution
Plans" and allow a credit union to take on a measured amount
of risk while gaining some of the benefits of self-funding. Typically,
this approach relies on a fully-insured "base plan"
that carries a high-deductible and co-insurance, but comes with
a significantly lower premium than a traditional HMO or PPO. The
employer shares the responsibility with the employee for paying
for the upfront deductible and coinsurance.
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