Nailing down a health-care policy for your startup business can be like the timeless, fruitless search for the Holy Grail. Entrepreneur after entrepreneur can testify to the frustrations of trying to find an insurer who is willing to take on his business.
But health insurance policies are available – though usually at high cost – to most small businesses. The key is in knowing how and where to look for them.
Understand the varieties of health insurance plan design
Entering the world of health-insurance plans is like wading into thick alphabet soup. You need to start with a basic understanding of the coverage possibilities that you might see.
Indemnity or fee-for-service (FFS) plans are the traditional policies your parents grew up with. Go to whatever doctor you want; the doctor sends the bill to the insurance company and you’re covered, maybe having to pay only for an office visit. FFS plans are still around today, but you’ll pay far more out-of-pocket expenses and higher premiums in exchange for the maximum flexibility.
Managed care is the reigning paradigm in health insurance today. Preferred provider organizations (PPOs), point-of-service plans (POS) and health-maintenance organizations (HMOs) are all variations on this theme. These plans use “networks” of physicians, hospitals and other providers that have agreed to provide comprehensive services to plan members in exchange for group discounts.
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