Major medical plans don't cover every aspect of healthcare, nor are the leading providers always the most affordable options. For these reasons, small business owners sometimes must consider supplemental or alternative plans to bridge the gaps.
High-Deductible Health Plans plans, dental insurance and vision plans have gained increasing popularity among employers wishing to provide more for their employees, though at least one product may be on its way out of favor.
High-Deductible Health Plans
Mini-medical policies with annual spending limits enjoyed a surge of popularity among small business owners, but the recently enacted healthcare reform law forbids employers with 50 or more employees from providing sub-standard insurance that covers less than 60 percent of workers' medical costs. Since most mini-med plans fall short of this number, they likely are being phased out for those size employers and replaced by High Deductible Health Plans, which meet the healthcare reform law's benefit requirements, but are more affordable for employers.
To find these plans, small businesses, which are not required to offer health insurance under the healthcare reform law, are encouraged to enroll in the Small Business Health Options Program (SHOP). Starting in 2014, employers with up to 50 employees can access the SHOP online federal health insurance exchange to purchase coverage for their workers. The program, which pools risk among businesses nationwide to lower premium rates, will be rolled out to employers with up to 100 employees in 2016. (For more information about the healthcare reform law see the article, "The Affordable Care Act.")
Dental Insurance: Something to Smile About?
Like their major medical cousins, dental insurance programs cover a wide range of benefits and services. Leading plans include:
- Indemnity. In this, the most common type of dental insurance, the business owner or consumer pays annual or monthly premiums in exchange for dental services. Coverage is often capped, with the plan paying up to a set amount for dental work. Paperwork can be heavy, since these policies operate on a reimbursement model. On the plus side, most indemnity programs let patients choose any dentist, and the provider will pay up to 100 percent of standard fees.
- Dental Health Maintenance Organization (DMHO). These programs pay policyholders' annual premiums to visit dentists within the network a set number of times a year. In turn, the dentists receive a flat rate for providing care. Plan members do not choose their dentist, nor does coverage apply for out-of-network dentists.
- Preferred Provider Organization (PPO). PPO policyholders choose their dentists from a predetermined network of providers and then pay for discounted dental services, with possible surcharges. While participants may visit out-of-network dentists, this can be a costly option.
- Discount Dental Plans (DDP). Growing in popularity, discount dental plans have no service caps. Dentists in DDPs simply agree to provide pre-negotiated discounted care to group members. Patients must pay out of pocket for the services they receive at the special rates.
Vision Plans: A Clear Picture
Vision benefits supplement health insurance policies, offsetting the high costs of regular eye exams, prescription eyewear and the like. Vision insurance can be obtained by individuals (purchasing their own plans); through groups, including an employee's company; or through government programs, such as Medicaid. But more often than not, vision insurance is a wellness benefit coupled with HMOs, PPOs and indemnity (traditional) health insurance, which is contracted with networks providing eye-care services. Available plans typically include:
- Vision Benefits Package. For a yearly deductible, membership fee and/or co-pay, members with a vision benefits package are provided with eye care services. Plans vary, from basic coverage to enhanced products. Basic packages typically cover preventive eye exams, eyeglasses or contact lenses. Some provide allowances for more costly designer frames, specialty lenses and LASIK surgery.
Before accessing services, however, participants may have to pay a set deductible. After that, they make fixed co-pays to a network provider each time they use eye care services. On the downside, vision benefits packages usually do not offer unlimited access, with eye-care services available a fixed number of times annually.
- Discount Vision Plan. These programs provide lower-cost eye-care services upon payment of annual fees or membership dues. Premiums vary according to the coverage brand and the number of family members enrolled. Participants either show a vision plan I.D. card and pay the provider directly, or make advance discount payments to the plan provider. In the latter, the member uses a coupon or debit card. Enrollees usually can access eye-care services as often as needed. If they choose to use non-network providers, participants must pay in full when services are rendered. They later may request reimbursement for any amount eligible for coverage.