In Virginia, small group health insurance is available to groups of 1-50 employees/members and is guaranteed-issue, meaning that no one in the group can be denied due to pre-existing conditions. To purchase a plan, you need to have at least one full-time equivalent employee. This means that even solopreneurs -small business owners who don’t have employees- can form a “group” provided that they’re a W-2 employee of the company that you own in order to be eligible for group health insurance. If at least one employee enrolls in the plan, you can then enroll yourself. A family member (including spouse), part-owner, or partner in your company is not considered an employee.
There a several types of small business health insurance plans for groups. You can choose from managed care, indemnity fee-for-service, and high-deductible health plans. A full description of group health insurance options for the self-employed is here but below are the basic definitions of each:
Health Maintenance Organization (HMO): An HMO is a managed care plan that only covers medical services received at an in network provider. All care is organized through a primary care physician (PCP) and patients must get a referral from their PCP if a medical condition requires treatment from a specialist. (A referral is not needed for Emergency Room visits.) Because HMO plans are more restricted, premiums and copays are usually lower than other plans.
Preferred Provider Organization (PPO): Another managed care plan is thea PPO plan, members can choose to visit an in- or out of network provider, but the plan provides a lower percentage of coverage for going out-of-network. In addition to copays, PPO plans usually have coinsurance and annual deductibles. Patients may sometimes have to pay for care received out-of-network up front, and then file a claim with the insurance company to get reimbursed for covered medical services.
Point of Service (POS): This type of managed care plan is a cross between an HMO and a PPO. The HMO aspect requires that patients first see their primary care physician to receive care and get a referral in some cases. The PPO element allows patients to receive some covered services at a provider outside the plan’s network, but this might also require a referral from the PCP. Members may have to file claims forms themselves.
Indemnity Plan or Fee for Service (FFS): Plans allow members visit any doctor or hospital they choose, but this flexibility comes with higher out-of-pocket costs. An FFS plan can include a PPO option depending on the plan’s service area. By using a PPO provider, members typically have lower out-of-pocket costs, and they usually don’t have to file claims.
High Deductible Health Plan (HDHP): Members pay a high annual deductible for having this plan meaning they must pay a higher amount out of pocket in order to then receive covered expenses. To compensate for the high deductible, this type of plan usually has a lower monthly premium than other plans, and can be paired with a Health Savings Account (HSA), funded through pretax dollars that are automatically deducted from employees’ paychecks. Employees can use funds from the account to pay for out-of-pocket healthcare expenses.
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