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Which health insurance is best for my employees? Here are some tips

Opinion

Andrew McNeil (andrewm@arrowbenefitsgroup.com, 707-992-3789) and Rosario Avila (rosarioa@arrowbenefitsgroup.com, 707-992-3795) are senior benefits advisers at Arrow Benefits Group in Petaluma.

Employers often ask us what other companies are offering when it comes to their benefits program.

While we can benchmark a benefits program against others in their industry or in our geographical area, we will instead give a general overview of the trends we see for small businesses (under 100 employees) in 2022.

HMO medical insurance

Medical insurance in the North Bay is largely for health maintenance organizations, or HMOs. Kaiser Permanente has, by far, the largest HMO presence (we estimate around 70 percent of the business).

Some employers offer HMOs from other major carriers such as Blue Shield of California and Anthem Blue Cross, but those plans are generally much higher in cost, as they aren’t tied to one medical group. The most popular HMOs have lower premiums because they only work with a single medical group.

Medical Insurance here is largely HMO. Of the HMO carriers, Kaiser has out beat their competition as most popular carrier in every “metal” tier. Here are the most popular plans by tier:

  • Kaiser Bronze 60 HMO 6300/65
  • Kaiser Silver 70 HMO 2250/55
  • Kaiser Gold 80 HMO 250/35
  • Kaiser Platinum 90 HMO 0/20

HMO analysis

Looking at each tier, Kaiser is not the cheapest option, nor do they have the best plan designs but, they are the most popular because of ease of use. This has made it highly attractive for employers to offer Kaiser as part of their employee benefits program.

PPO medical insurance

Although HMOs are indeed a large part of the medical insurance option here in the North Bay, preferred provider organizations, or PPOs, still have a place with many employers.

Though generally more expensive, PPO plans offer members the ability to receive care from any provider — in or out of your network. This means you can see any doctor or specialist or use any hospital.

In addition, PPO plans do not require you to choose a primary care physician (PCP) and do not require referrals.

Blue Shield of California holds the most popular PPO plans in all the metal tiers:

  • Blue Shield Bronze Full PPO 6250/65
  • Blue Shield Silver 70 PPO 2250/50
  • Blue Shield Gold Full PPO 500/30
  • Blue Shield Platinum 90 PPO 0/10

PPO analysis

Looking at each metal tier, once again, Blue Shield is not the cheapest option, but they do have the best plan design (for the tier).

Looking further, the cheaper plans from some of the other popular PPO carriers offer a small savings for a larger slash in plan benefits, so Blue Shield’s popularity indicates employers are willing to pay a little more to offer a plan that has better benefits.

Andrew’s PPO story

In short, the main differences between HMOs and PPOs are affordability and flexibility, but which will work best for you really depends on your current situation.

I’ve always opted for PPO plans because they allow me and my family the freedom to use any provider we choose while not requiring a primary care physician to be the gatekeeper.

The difference in options became a reality for me while I was on an HMO plan. The insurance company did not have the correct primary care physician for my daughter in their system.

When my daughter’s doctor tried to refer her to a specialist, the request was denied because the referring physician was not the PCP listed in the insurance company’s system.

The office of the provider my daughter was referred to refused to book her appointment because the HMO denied the referral. It was very stressful and hindered the urgent care she needed. Had we been on a PPO at that time, it would not have been an issue.

Rosario’s HMO story

There’s a lot to be said for convenience.

I have been enrolled in both PPO’s and HMOs. When my kids were young, I wanted more streamlined solutions for my family not only with specific providers but also plan design options.

The convenience of going to one location such as Kaiser to see a doctor, then walk to the next floor to get lab work done and then finally walk to the pharmacy for prescriptions was worth so much to me especially while doing all of this with a sick child during the winter or rainy months.

When my daughter went off to college in Southern California, I wanted her to have easy access to care without adding to her new challenges at school and again, the Kaiser/HMO made sense.

Her medical records were in their system, and she knew how to navigate the medical system which gave me peace of mind and her no excuse to say she couldn’t go to the doctor. An HMO was a win-win for me.

2022 has just begun and the popularity of each of the carriers tells us there is no one size fits all answer. Offering employees a better plan design or more convenience options can give your company a competitive edge and keep you in the competition.

Opinion

Andrew McNeil (andrewm@arrowbenefitsgroup.com, 707-992-3789) and Rosario Avila (rosarioa@arrowbenefitsgroup.com, 707-992-3795) are senior benefits advisers at Arrow Benefits Group in Petaluma.

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