The US health system is infamous for being one of the most complicated and expensive in the world. Only a tiny percentage of the population qualify for free healthcare. Those who don’t qualify either invest in a health insurance policy or face a huge bill should they require medical services.
More than two-thirds of the US population has private health insurance according to census data. And most of the working age population (155 million ‘non-elderly’ people) receive it from their employer.
There are two key reasons why employers should be offering health insurance to their employees in the US:
Firstly, you may be legally required to do so. The Affordable Care Act stipulates that businesses with 50 or more employees working full time must provide health insurance to them and their dependents under the age of 26, or pay a fee.
Secondly, even if you’re not legally obligated, employees in the US will be expecting it. And we’re not just talking about the most sought-after talent – most workers will expect it.
When you look at the reality of healthcare costs, it’s easy to see why individuals look to businesses for support. For example, the average cost of an ER visit is $1,900 to $2,100, according to the National Institute for Health – although this can be considerably more or less, depending on the precise nature of the emergency.
Would you like to receive FREE expert advice from a US healthcare expert? Engage Health Group has links with the best-informed industry insiders. Together we’ll answer all your questions and give practical advice and guidance for setting up a US health policy.
The Affordable Care Act stipulates that insurers must offer the following services on a healthcare policy:
However, insurers can – and do – offer more services in their plans. Plans will vary from basic to advanced coverage, typically symbolised by a metal element: bronze, silver, gold or platinum.
It’s worth keeping in mind that the plan with the lowest premium is not always the best value, as it can result in you paying more towards a claim (known as the ‘deductible’).
What works best for one company, might be a bad option for another. A specialist US Health Insurance Broker will ensure your budget is spent wisely and help you negate any nasty surprises further down the line.
Would you like to speak to an expert US health insurance broker? Engage Health Group will guide you through the basics of the US health system and, should you so wish, connect you with a trusted US broker.
There are several types of business health insurance plans available in the US, each with its own benefits and drawbacks. The most common plans include:
Preferred Provider Organizations (PPO):
A PPO gives individuals and families access to a network of healthcare facilities and practitioners at reduced rates. They can also get coverage from providers outside of the network (though unlikely to get reduced rates!). PPOs tend to cost more than other types of plan for this reason.
Health Maintenance Organizations (HMO):
An HMO is a more restrictive, but lower cost alternative to a PPO. Under a HMO plan you are restricted to the network of providers listed in the plan. This means you can’t access out-of-network health services unless it’s an emergency. The other key difference is that under an HMO plan you must first see your Personal Care Physician (PCP) and they will refer you to the relevant specialist as they see fit.
Point of service plan (POS)
A POS is essentially a blend of the PPO and HMO arrangements. It’s similar to a HMO in that you begin by choosing a primary care doctor who will then decide whether you need to be referred to other services. But unlike an HMO (and more in keeping with a PPO), it’s possible to use out-of-network services, but you will need to pay more for the privilege. The POS service is priced somewhere between a PPO and HMO.
High-Deductible Health Plan (HDHP)
A HDHP provides a significantly lower health insurance premium in exchange for a higher contribution towards healthcare costs as and when they’re needed. For this reason, they’re often seen as a better alternative for younger, healthier people. In other words, it can represent better value if you rarely ever make a claim, but will be worse value if you need to claim more frequently. Just be sure you can afford the out-of-pocket expenses should a claim be required!
Self-Funded Plan
In a Self-Funded Health Plan, a company directly insures its own employees through its own funds, rather than via a third-party insurance provider. The key benefit is that it allows companies full flexibility: they can choose the administrator, choose the hospital network, choose the pharmacy plan and select all the service providers (such as telemedicine, mental health, fertility and more).
A Self-Funded Plan is worth considering for companies employing more than 50 employees with a young healthy workforce – or because they are interested in taking control of their health plan spend and enhancing the quality of care.
Businesses opting for a self-funded plan usually invest in Stop Loss Insurance too. This ensures they have emergency financial back-up in case of catastrophic losses caused by higher than anticipated claims.
The average of cost of healthcare in the US is $560/month, according to analysis by ValuePenguin. But prices vary wildly due to the following factors:
Premium vs deductible
When choosing a health insurance plan for your business, it’s important to consider both cost and coverage. Premiums, deductibles, and co-pays can vary greatly between plans, so it’s important to compare options and choose a plan that fits your budget.
A policy with a higher premium (the monthly or annual cost of the plan) is likely to have a lower deductible (the amount due to be paid on a claim before the insurance kicks in to pay the rest). And vice versa!
Scope of coverage
Additionally, you’ll want to consider the coverage offered by each plan, including the types of services and treatments covered, as well as any limitations or exclusions. It’s important to strike a balance between cost and coverage to ensure your employees have access to the care they need within budget.
Type of plan selected
There are a variety of ways of accessing health insurance, including: Preferred Provider Organization (PPO), Health Maintenance Organizations (HMO), Point of Service Plan (POS) and High-Deductible Health Plan (HDHP). Each one has implications for the cost of your policy. See previous section for more information.
Number of employees
The more employees covered in the scheme, the more of a per-person discount you’ll receive.
Health profile of employees
The demographics and medical history of employees will affect the premium. As with any type of insurance, the more likely a group of individuals are to make a claim, the higher the premium will be.
Location
Your location has a huge impact on premiums. For example, the cost of buying health insurance in New York could be twice what you’d pay in California.
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There are more than a thousand health insurance providers in the US, according to the National Association of Insurance Commissioners. The best recognised providers in the US include:
Each insurer will have different expertise in different regions and a variety of plans on offer. The plan which works best for you may well come from a smaller provider.
Engage Health Group will give you access to experts in the US market with knowledge of all policies offered by insurers across the country. If you’re looking for the best policy for your business, get in touch on 01273 974419 or email [email protected].
US healthcare is a highly complex market requiring in-depth industry knowledge. Many states will require you to be a licensed broker in order to buy Group Health Insurance.
However, there are two other alternative methods. You can choose to join a Professional Employer Organisation (PEO) or an Association Health Plan (AHP).
Professional Employer Organisations (PEO):
A PEO is essentially a HR outsourcing partner which handles employ benefits, payroll and other HR functions on behalf of businesses. Businesses can benefit from outsourcing many HR functions, but it does come at a high price tag. The other drawback is that you are essentially given a health insurance policy with little or no input – so there’s little flexibility and no opportunity to shop around for a better deal.
Association Health Plans (AHP):
An AHP gives you the chance to pool together with other businesses (usually of the same industry and/or in the same location) and benefit from the bulk-buy discount this enables. You must pay a membership fee and, as with the PEO option, you lack the chance to shop around and tailor a policy to your liking.
If either of these options sound attractive, it’s still best to speak to a broker first. They can explain in detail what these arrangements mean for your specific business and compare and contrast it with the pros and cons of shopping around for a custom-made deal.
Our dynamic international team is led by Ian Abbott, formerly of Bupa Global and includes industry specialists previously of Metlife and Aetna. They will talk you through all the options for looking after your US employees. Whether you’re looking for a standalone US health policy or considering a multi-country global policy, we can advise you on the best route forward.
The benefits of enlisting Engage Health Group and our US partners include:
To access free impartial advice and assistance right now, contact our team on 01273 974419 or email [email protected]
Yes, in fact most US citizens access health insurance from their employer. But keep in mind, in most cases an employee will pay towards their health insurance but, as of 2023, it can’t be more than 9.12% of their income.
Due to the high cost of health insurance in the US, it is common practice for employers to not cover the cost of the employees premium in full, but cover anywhere between 75% – 100% of the premium, deducting the remaining premium from the employees salary.
Generally speaking, employees are able to add their immediate family members to the their company health coverage, to benefit from the improved premiums which companies access, this cost is generally deducted in full from the employee’s salary.
Although they will be treated, they will be charged afterwards. And the costs can be colossal. This is why health insurance is strongly advised for all who can afford it.
Insurers are legally required to provide health plans for companies with two or more employees, so you shouldn’t have any problems finding a policy.
Business owners and contractors can apply for health insurance through the ‘Health Insurance Marketplace’, a resource dedicated to helping individuals, families and small businesses. You might even qualify for premium tax credits and other insurance reductions. A broker will advise on these issues.
For the most part, the US is excluded from global healthcare plans because it has such a unique set of rules and regulations. However, there are options available. Find out more about International Health Insurance and how it works.
Free healthcare is only available to those earning below a certain level and those over a certain age. It’s often limited to inpatient care (care that typically requires an overnight stay) as opposed to check-ups and scans.
