How to Put Together an Employee PPO Health Insurance Plan

A preferred provider organization (PPO) combines traditional fee-for-service coverage and an HMO, which is a type of prepaid insurance. A PPO typically lets your employee choose his own doctor and specialists while paying a higher out-of-pocket cost due to deductibles. When you put together a PPO health insurance plan for your office, you should weigh the costs for you and your employees.

Difficulty: Easy

Instructions

1. Talk to your employees before you put together a plan and see what their expectations are for health insurance.

2. Research different PPOs to determine what the copays and deductibles will be. Larger companies may be able to offer different levels of PPOs. You can start your PPO research at DukeJournals.org (see Resources below).

3. Put together health coverage that offers the most services for your premium. With a PPO, the premiums range from extremely low to drastically high. A plan can be custom designed for your group.

4. Research the insurance carrier offering you a PPO to make sure it is reputable and pays claims quickly. You also want to see how easy the plan is to administer. Lower-cost premiums may mean poor service or excess work on your part.

5. Count the number of in-network providers. Without a reasonable number of doctors, the benefits of a PPO are lost, as your employees will be forced to visit out-of-network doctors. Any insurance plan you select should have several quality doctors who are conveniently located.

6. Compare in-network and out-of-network costs for treatment. If the out-of-network costs are substantially higher, you may want to put together a plan that is more reasonable for your employees.

7. Determine how much effort it will take your employees to be reimbursed for medical care. With some PPOs, employees cover all costs and are reimbursed for portions of their payments. Others require lengthy forms and prolonged claims processes. Try to find a plan that is easy for your employees to use.

8. Evaluate the benefit of offering both a PPO and an HMO. Each employee plan has attractive features that are most suitable during different periods of a person's life. A qualified broker should be able to work with a carrier to provide different options within a single group plan.

Tips & Warnings

• Work with a broker to get the best premiums on health insurance. He can also administer the plan and handle the majority of the work, freeing up your human-resource administrator.

Resources

• DukeJournals.org for PPO research