Most people get a bit nervous when they start seeing the alphabet soup of insurance. Terms like HMO, PPO, and POS make people gasp because they do not understand what they mean and instantly clench their wallets because they are sure that money is about to be siphoned from it. Well, that is what we are here to clear up. The best health insurance plans for your small business come through these terms, and we will assist you on understanding the difference and guide you in making an informed decision. Here, you will learn how to qualify your small business on PPO health insurance in Texas and why it will benefit you the greatest.
The Differences Between the Best Health Insurance in Texas
When an individual begins to shop for the best health insurance plans, they are given options of what are called networks. These are basically a list of doctors and facilities the insurance company has contracted with to provide you with the best health insurance rates. When you go to a doctor or hospital outside this network, you will not receive this discounted rate and will end up paying much more for your health care services.
However, each of these organizations is structured differently. Let’s explore how they treat doctors, facilities, and patients.
Health Maintenance Organizations (HMOs)
HMOs put restrictions on a health insurance plan subscriber. They require you to see only the doctors and providers within the network. Your HMO doctor, called a primary care physician (PCP), handles all your medical care. You will need to go through this doctor for all your medical treatment, to have any tests done, or when you need to see a specialist. And if your current doctor is not on the network list, you need to switch doctors, or you will not have coverage under your health care plan if you choose to continue to see him.
However, in an emergency situation, a health insurance company will pay for medical expenses incurred for out-of-network medical care. For example, if you are in a car accident, your insurance will cover medical expenses should the ambulance take you to a hospital that is not in the network under your policy. Finally, HMOs may also require you to live or work within the network you select.
Preferred Provider Organizations (PPOs)
A PPO is similar to an HMO in that it offers coverage through a network of providers but gives you more freedom and flexibility. For example, you are not restricted to a single health insurance plans list of doctors. It still has an in-network and out-of-network list, but instead of having no coverage for out-of-network doctors, you have coverage at a reduced rate. Another added benefit is that when you want to see a specialist, you are not required to get a referral from your PCP as you would with an HMO.
Point of Service (POS)
This plan is a mix of both an HMO and a PPO. It is like an HMO in that you may need to select your Primary Care Physician (PCP). Then it acts like the PPO because you do not need a referral to see a specialist, and you pay less for services when you use in-network doctors.
Exclusive Provider Organization (EPO)
These networks are the strictest. They take HMOs a step further. The only reason you would be able to go out of the network would be in the event of an emergency.
Qualifications for Small Business PPO Health Insurance
As a small business owner, you want to be able to provide your employees with the best health insurance benefits that the larger companies provide their employees while remaining Affordable Care Act (ACA) compliant. This will ensure that you maintain an advantage with your current staff because they will not seek to leave. It will also help you draw future employment because you can offer a benefits package that larger corporations provide. But how is this possible? You are one of the small businesses looking to obtain PPO Health insurance. So, what qualifications do you have to add this to your benefits package?
There are a few questions you need to ask yourself before you consider the best health insurance for your small business:
How many employees do I need to cover with small business health insurance?
Small business health insurance requires 1 – 50 Full-Time Equivalent (FTE) Employees to apply. If you have more than 50 employees, you are then required to either offer a comprehensive affordable health coverage package to your employees or make an employer shares responsibility payment to the government to compensate.
Who do I offer small business health insurance to?
All Full Time (30+ HR per week) employees will be eligible for coverage. You are not required to offer coverage to your part-time or seasonal employees. However, you may offer part-timers coverage if you choose, but you are not obligated to.
Does my health insurance plan have enrollment requirements?
You must have an enrollment of 70 percent to complete the process. This is only enforced during the initial enrollment when it occurs outside of the normal November ACA Open Enrollment period. Future enrollment periods during Open Enrollment for the ACA, the percentage benchmark does not apply.
Will my small business health insurance be limited to a location?
You must have an office or physical location within the state where employees work. This can vary depending on if your business operates in multiple states. Then each state must have a physical location or office where employees report to.
This benefit is better known as SHOP, or Small Business Health Options Program. Under it, small business owners can offer their employees the best health insurance plans. They can provide essential health benefits that do not exclude pre-existing conditions as per Affordable Care Act stipulations.
Which PPO Health Insurance Texas Plan is Best for My Small Business?
Each business will be different, and the size of your employee roster will be a great determiner of how you should proceed. The benchmark is around twenty-five employees on where you will make the decision. This is primarily because of the tax implications. As stated, if a small business is below 50 employees, you will not be required to provide health insurance. However, because of the small business tax credit, small businesses are encouraged to begin to invest in their employees and provide the best health plan coverage. But what is the business tax credit, you ask?
Business Tax Credit – This tax credit was created under the ACA. It stipulates that a business would be eligible for a tax credit for two consecutive years if it met the following stipulations:
- It purchased employee insurance through SHOP.
- The company had fewer than 25 employees.
- Your company paid less than 56K in wages for their employees.
- Your company spends at least half the cost of your full-time employee’s health care premiums.
When we begin to look at more than twenty-five employees, this tax credit goes away, and employers have other methods to assist their employees with their health insurance premiums.
ICHRA – Individual Coverage Health Reimbursement Arrangement – Through this program, small businesses allow employees to shop the open market for insurance on their own. This is through a tax-free allowance and meets ACA stipulations. Once their insurance is purchased, the employer then reimburses them the stipulated amount.
The employee shops and purchases the best health insurance plans on their own; it can be on or off-exchange and include their family members if they choose. All they do is submit their payment as a claim through ICHRA, and then once approved, the business reimburses the employee.
There are a few ways ICHRA pays out for the employee:
- Method One: Pre-Imbursement Only: This will give the employee a predetermined amount of money or a percentage toward their premium.
- Method Two: Premium Imbursement + Pretax: All the options of Option One plus the option to pretax excess premium not covered set amount.
- Method Three: Premium Imbursement + Pretax + Medical Expenses: All of one and two plus a predetermined amount of pretax dollars for medical expenses.
You have options if you are a small business owner and need the best health insurance for your employees. You already qualify to offer PPO health insurance in Texas, and you have the Affordable Care Act solutions that will give your employees the coverage they deserve and keep you in line with the ACA guidelines. Bear in mind that the more you offer, the more faithful your employee base becomes. Programs like the business tax credit and ICHRA help you and help your employee obtain the insurance they deserve and strengthen their commitment to your business.