A plan that could be used to purchase health insurance for the organization
Health Maintenance Organization (HMO) insurance plan would be the most appropriate cover for the organization comprising of over fifty employees. It offers limited coverage to patients through a network of doctors employed or contracted by the HMOs. It does not offer out-of-network care except in cases of emergencies. Employees under the HMO plan must work or reside in the HMO service area for them to be eligible for coverage. Moreover, they would be provided with a wide range of comprehensive health care for a predetermined periodic payment.
Extent to which employee lifestyle choices and health economics would factor in to the chosen plan
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In terms of employee lifestyle choices, the HMO plan is restricted since one is allowed consult a provider within the network and decide on a specific primary care provider (PCP). Any visits to a specialist must be first approved by the PCP. In the health economic perspective, HMOs meet all expenses incurred during health care provision at the marginal cost since they employ vertical integration (One Medical, 2013). Vertical integration is considered effective in containing and reducing health care costs since it enables insurers to decrease transaction and moral hazard costs. It also enables HMOs to settle for reduced prices with health care providers (Baranes & Bardey, 2015). Therefore, the HMO plan seems the most favorable health plan for employers as it is cost friendly and comprehensive.
The Affordable Care Act (ACA) enacted in the 2010 by the previous presidential administration aimed to make health insurance affordable to many people. As a result, it had a number of implication on insurance plans. For instance, it does not allow co-pays or deductibles for preventative services provided to patients covered HMO plans (Bruce, 2016). The HMO plan has the characteristics similar to those prescribed by the ACA, that is, it keeps costs low and allows consumers to save money, thus becoming the most preferred plan when deciding to purchase insurance.
Advantages and two (2) disadvantages of purchasing health insurance for your employees, as opposed to having your employees receive governmental insurance
Employers enjoy a number of advantages when they purchase health covers for their staff members as opposed to them receiving government insurance. First, money is saved on taxes when employers pay health covers for their employees because authorities view health insurance as 100% tax deductible as normal business expenses. Even employees benefit since they can pay their premiums on a pre-tax basis when payments are made by the employer. Second, health coverage provided by employers offers better benefits such as better mental health care and pregnancy care compared to government insurance plans, for example Obamacare, which provides the minimum required benefits on mental health and pregnancy care (Carolyn, 2013).
Offering health insurance to employees is associated with a number of disadvantages. First, a business incurs significant costs and financial planning becomes quite challenging. Presently, analysts argue that cost of insurance has increased by nearly 50% thus making employees assume a larger share of healthcare costs in terms of premiums and costly deductibles. The trend has forced numerous organizations to pass down some costs to their employees. Second, employers are faced with difficulties when they try to change plans, that is, workers have to comply with extensive paper work when deciding to change the health plans (Gumus & Regan, 2015). Business owners have additional work of enquiring about appropriate ways to invest employees’ money for maximum return, the ideal type of coverage, changes in administrators and other activities that present an unnecessary headache.
Conclusively, the Health Maintenance Organization (HMO) health cover was considered the most preferred plan by employers due to its cost effectiveness, its comprehensive cover and congruency with the Affordable Care Act. Employers that offer health insurance to their employee benefit by saving money on taxes and providing better benefits to employees. However, some disadvantages include high costs associated with the plans and difficulties encountered when trying to change the plans.
References
Baranes, E., & Bardey, D. (2015). Competition between health maintenance organizations and nonintegrated health insurance companies in health insurance markets. Health economics review , 5 (1), 36.
Bruce, J. (2016, Jan 13 ). Half Of Obamacare Choices Are HMOs Or Narrow Network Plans . Retrieved from Forbes : https://www.forbes.com/sites/brucejapsen/2016/01/13/half-of-obamacare-choices-are-hmos-or-narrow-network-plans/#3b268e157561
Carolyn, M. (2013, Jun 23). Employer Based Coverage Or Obamacare Plan? Which Is Better? Retrieved from Forbes : https://www.forbes.com/sites/carolynmcclanahan/2013/06/23/employer-based-coverage-or-obamacare-plan-which-is-better/#6d8110142a57
Gumus, G., & Regan, T. L. (2015). Self-employment and the role of health insurance in the US. Journal of Business Venturing , 30 (3), 357-374.
One Medical. (2013, Dec 20). HMO vs PPO: How to Pick Your Health Insurance Plan . Retrieved from One Medical : https://www.onemedical.com/blog/live-well/hmo-vs-ppo/
