Group insurance, a major component of employee benefit plans, provides an insurance technique of considerable economic, social, and political significance. The components of group insurance are: medical/health, dental, vision, life insurance, short and long term disability and increasingly long term care insurance.

Group health Insurance

Health insurance is one of the most important benefits employers provide to employees in that employees depend on and use their health benefits frequently.  The cost of providing this benefit often represents a significant part of most group medical plans it is important to distinguish the different types.

Indemnity / Fee for Service (FFS)

This is the traditional type of health insurance with FFS you can choose your own physicians and hospitals.  The insurer reimburses providers by paying ìreasonable and customaryî or ìusual chargesî.  Most of these plans require a deductive and coinsurance on your part.

Preferred Provider Organization (PPO)

Similar to indemnity / fee for service, but with a network of providers (physicians and hospitals).  You are free to choose a physician or hospital from a preferred provider list.  When you use preferred providers you will pay less in deductibles, co-payments and co-insurance than if you use providers not in the network.

Health Maintenance Organization (HMO)

A Primary Care Physician (PCP) must be selected from a network at the time of enrollment.  This PCP will manage all medical / health care.  In order to see a contracted specialist or receive services from a hospital a referral must first be obtained from the PCP except in cases of life threatening emergency.  No benefits are provided if you go outside the network oh HMO providers.  The co-payments you are responsible for in an HMO are typically very low.

Point of Service (POS)

Similar to an HMO you must select a PCP that will manage your health care from the network. Benefits using the network are very similar to HMO benefits with very low co-pays.  However, you may receive services outside the network but with higher co-pays, co-insurance and deductibles.

Group Dental Insurance

Today over 55% of all businesses offer dental insurance either totally or partially paid by the employer. Like group medical insurance, dental can be indemnity / fee for service or the newly evolving Preferred Provider Organizations (PPO) and Dental Maintenance Organizations (DHMO), which work like group medical HMOís. All dental plans emphasize preventive care while many provide coverage for major procedures and orthodontic.

Group Vision

Another new, evolving and popular employee benefit is vision care.  Vision plans can be either indemnity / fee for service provider organizations (PPO) or discount programs through selected retailers.

Group Life Insurance

Group Life insurance and accidental death and dismemberment are incorporated in most employee benefit plans.  The amounts can vary widely from employer to employer but most often you will see two formulas for the amount of benefit:

Group Short and Long Term Disability Insurance

Disability benefits are payments that provide income when an employee can no longer work due to an illness or non-work related accident.  Short term disability covers a percentage of an employees income (typically 67-70 % to a weekly maximum benefit} to a maximum duration of 13 to 52 weeks. Long-term disability coverage normally will provide benefits to age 65 or 70 while providing 60-70 % of an employeeís monthly income to some specified amount. Contract language and definitions of disability can vary widely from carrier to carrier and be liberal to stringent. Be aware, many employers and employees have been hurt by not understanding the ramifications of the contract language in the policy they purchased.

Long Term Care

Long-term care provides coverage if you have a chronic illness or disability that leaves you unable to care for yourself for an extended period of time.  You can receive long term care in a nursing home or your own home.  Long-term care insurance can be used not only for seniors, but persons of any age who have been in an accident or suffered a debilitating illness. Long-term care is the fastest growing employee benefit.


Articles of Interest

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