SMALL BUSINESS: Choosing Employee Health Insurance

By JAMIE HERZLICH
NewsDay.com
September 3, 2007

Choosing a health plan for your employees can be daunting.You're constantly trying to balance your ability to offer competitive coverage with ever-rising health care costs.With so many options and limited funds, how do you choose the right plan?

You can start by getting a handle on your employees' needs, experts say."I think the place that companies get hurt the most is in not taking the time to really figure out what's right for their company," says Josh Senders, a partner with Pilot Employee Benefits, a Melville benefits consulting firm. Conduct a survey of your employees, he suggests, and figure out what's important to them. You may discover that the majority aren't wed to any one doctor, he says, or that most of their doctors belong to the same network. In that case an HMO (health maintenance organization) might make sense, because patients are generally required to go to a health care provider or hospital within the plan's network. If you're looking for more flexibility, consider a PPO (preferred provider organization) or POS (point of service) plan. Patients typically can go out of network, but would likely pay a higher deductible or co-payment to do so.

Just remember that, when picking a plan, assess all the costs, including deductibles and co-insurance. The plan must not only be affordable to you as a business owner but also to your employees, who likely will be contributing toward their health care.