So, you’re in the market for a health care benefit plan but you can’t make heads or tails of the insurance alphabet soup? Let us help you define HMOs and PPOs, the most common of several available insurance options, and understand some of the cost containing options.

Health Maintenance Organizations or HMOs offer affordable health care options within somewhat restrictive parameters. For example, employees needing specialist care must first obtain a referral from their primary care physician. Co-payments are generally lower with these types of plans. Covered employees must choose a primary care provider and seek care within the network of participating providers to take advantage of the benefit. The good news is that the networks have been growing and there is a fair chance that your employees will be able to find a healthcare provider they like that participates. The bad news is that if an employee already has a doctor that is not part of the network he or she will realize significantly reduced benefits.

Preferred Provider Organizations or PPOs also require that employees turn to in-network providers to get the most from the benefit, but there is an important difference. PPO plans allow a bit more flexibility in that covered employees can visit a specialist without a referral from the primary care provider as long as that specialist is a part of the network.

Other options include POS or Point of Service and Fee for Service plans, the most flexible, and often the most expensive option, though it depends on the age and health concerns of your workforce.  All of these plans are available through companies such as Blue Cross Blue Shield, United Healthcare, Cigna, Aetna and others. Most offer plans for as few as two employees and as many as several thousands.

Regardless of the plan you choose there are a few things you can do to contain costs.

• The most obvious strategy is to opt for higher deductibles. As with any insurance plan higher deductibles generally translate to lower premiums.

• Ask for employee contributions. You can share some of the costs of health care coverage with your employees. How much they contribute will depend on a variety of factors. Review your budget and pay scales carefully to decide on a fair and reasonable percentage.

• In most industries, employees are responsible for the full cost of any dependent coverage. But in order to remain competitive, your business may want to consider dependent coverage.

• Streamline coverage options. You may choose to offer only the basics, such as preventive care and some emergency services. Additional benefits, such as infertility services, mental health or rehabilitation services, can be offered as your budget allows.

There is a seemingly infinite mix of coverage’s and options when it comes to health insurance. It is a good idea to survey employees, review several plans and consult your budget before you choose your company plan.

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