Group Fee For Service Plans Explained

What’s the most popular benefit an employer can offer? The easy answer: employee health insurance. Deciding which kind of plan to buy is not so simple –especially for smaller firms. With so many healthcare options out there it’s difficult to keep track of them all.

Fortunately, though it’s managed to pick up a new name, Fee-for-Service Plans, (aka Indemnity Plans), are still just traditional health insurance policies. They offer your employees the same health benefits your grandparents enjoyed giving them a rare degree of freedom when it’s time to pick a doctor or hospital.

With Fee-for-Service Plans, employees don’t need to wait for treatment if they have a medical emergency. You share the cost of a yearly deductible and a coinsurance rate, but everything else is covered by your insurance carrier—regardless of the cost.

What Should I Be Aware Of?

Taking on a Fee-for-Service Group Plan will be more expensive than typical managed care benefits, but it will also provide your employees with a wider range of healthcare options.

That’s not to say that it won’t have restrictions.

For example: Your Fee-for-Service plan may not offer your employees coverage for their preventative care needs; check-ups, routine doctors’ office visits, vaccinations, etc. could end up their responsibility. That tends to make indemnity group plans an unwieldy option for a business whose employees have families requiring regular doctors’ visits and preventative care services.

How Do I Decide Which Fee-for-Service Group Plan Is Right for Me?

• If you want to give employees the best Fee-for-Service Plan you can afford, find out what their healthcare needs are and ask them what they expect from their health benefits. It sounds simple, but it’s the best way to make fulfilling their needs a reality.
• You’ll be sharing both the annual deductible and the co-insurance portion of your employees’ medical bills. That could leave you paying 10% or 15% of those bills while your carrier pays 80% or 70%. Don’t forget to take each plan’s coinsurance rate into account as you shop around.
• Fee-for-Service plans usually have "caps," This cap defines the limits of the healthcare fees that you and your employees have to share each year. They can be as low as $1,000 or as high as $5,000. Keep that number in mind as you compare plans.
• There are two kinds of Fee-for-Service insurance policies (basic plans and major medical plans). Which type do your employees most likely need? “Basic protection employees” need a plan to pay for a hospital room, supplies, x-rays, prescriptions medications, doctors’ visits and outpatient surgeries. “Major medical plan employees” need a plan covering inpatient surgeries, extended hospital stays and costly illnesses or injuries. The difference can mean satisfaction and savings all around.

A Fee-for-Service Group Plan offers your employees comprehensive and immediate crisis healthcare. It’s a major selling point of Fee-for-Service insurance and what you should weigh against the financial risks.

Whichever group you end up choosing, remember that as your business grows, your employees’ insurance needs may change dramatically. The kind of plan that worked well for an office of ten may be a disaster in an office of thirty or forty.