Group Medical
Group medical plans are available to employers who have a at least two employees. Small group is generally considered to be those companies with fewer than 50 employees. The plans for these groups are standardized and rates are based on a number of factors including: ages of employees and dependents, number of dependents, participation, contribution, longevity with the current carrier, tobacco use, geography and small adjustments for claims experience.

Companies who have 51 or more employees have additional factors including a heavier weight on utilization, and industry. Large groups can have more flexibility in plan design.

There are several different types of medical plans: Traditional, HMO, and PPO. The HMO plan is the most restrictive in that employee and dependent must typically pick a primary physician (PCP). They use the PCP for all of their care unless referred to a specialist. The employee pays a co-pay for services at the time they are rendered. The rates tend to be lowest for HMO plans.

PPO plans are more flexible. You do not need to coordinate all your care through a PCP, but you do get a better benefit if you use the providers on the PPO panel. Some services may require a co-pay, other services may require a deductible that must be satisfied before benefits are paid. These plans are generally more expensive than the HMO plans.

Traditional plans allow you to see any licensed medical M.D. or D.O. of you choice without a referral. There is no change in the benefits regardless of what provider you use. These plans tend to be the most expensive.

Health Saving Account plans require a plan that meets the federal guideline to be eligible. These plans are high deductible plans and when they qualify you can set up an investment account similar to an IRA to pay for medical expenses on a pre tax basis. The investment income is accrued tax free. The money must be used for medical expenses. Any money left over at the end of the year can be rolled over each year. If you spend the money on non qualified medical expenses you will pay a 10% penalty along with your ordinary income tax on the money used.

Individual Medical
Individual medical plans are available. In Oregon they require the applicant complete a health statement survey. The insurance company cannot put riders on the policy to eliminate coverage for certain conditions. They must accept or reject the application as submitted. Individual medical plans are age-rated, so the cost will depend on the benefits you choose and how old the subscriber or member is. If you are rejected and live in Oregon you may be eligible for the Oregon Medical Insurance Pool.

Short-Term Medical Insurance (Temporary Insurance)
If you have a need for medical insurance for a specific duration less than 6 months, Short-Term Medical may be a good option. There are choices of deductibles and limited health questions. You can apply for the precise number of days you need to cover, not to exceed 6 months. You can purchase the coverage by the month, or the total amount of time all at once. This is ideal for the between job situation. You must be under age 65 to qualify.

Medicare Plans
Seniors who turn age 65 and select both Part A and Part B of Medicare can apply for a Medicare supplement plan. You should also consider adding Part D, prescription drug coverage. Seniors who do not purchase Part D will be subject to penalties unless they are covered by a credible group plan.

Vision
Group vision can be purchased as a stand-alone product, but is most often sold as a rider to the medical insurance. Most plans direct you to participating providers for exams, frames, lenses or contacts. The benefit usually allows an exam and change of glasses or contacts every two years for adults and once a year for children. These plans are usually very reasonably priced and are a nice benefit to add to your medical plan.

Section 125 (Cafeteria Plans)
This is an IRS plan that allows pretax payroll deductions for group premiums and other defined expenses. A company can provide a Premium Only Plan (POP) that allows employees to deduct their cost of the medical/dental premium from their paycheck before taxes are computed. The Full Flex Plan allows employees to deduct monthly for expenses they anticipate having. These include medical expenses that are not covered by the insurance such as co-pays or co-insurance, deductibles, non-covered items, etc. It also allows employees to deduct childcare expenses and other group benefit premiums they have to pay.

This is a win/win program. Both the employee and the employer save on payroll taxes.

Self-Insurance
For businesses that have 100 employees or more, partial self-insurance can be a viable alternative to the rising cost of traditional plans. These plans require management to take an active role in managing the plan. It allows the employer to design a plan that complements the company philosophy. With active management of the plan, costs can be contained better than with a fully-insured plan.

The company chooses a "stop loss" amount that they will pay and buys insurance for claims exceeding that amount. Depending on the size of the company and how much risk the company wants to assume the stop loss can vary. A third-party administrator (TPA) is contracted to process the claims and give administrative support. Generally, the cost of insurance, the TPA and the cost of the actual claims incurred are less than a fully-insured program and give the employer greater control of the plan.

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