A Guide to
Comprehensive
Health Insurance
Coverage – Part 1

To many small business owners, the world of health insurance can seem overly confusing to those without a background in the industry. It’s important to become familiar with the basics of comprehensive health insurance in order to offer employees the best available coverage without running afoul of existing legal requirements.

In part 1 of this series, we will outline some basic terms related to comprehensive health insurance coverage and give small business owners the knowledge they need to make informed decisions.

What is Comprehensive Health Insurance?

When we talk about health insurance, we’re discussing a process designed to help cover the cost of medical treatments, helping reduce the financial burden on individuals during health-related emergencies or procedures. Comprehensive health insurance is a type of insurance that covers an even wider array of services and procedures. We’ll cover those specific inpatient and outpatient services later.

Types of Health Insurance with Comprehensive Health Coverage

There are two primary types of health insurance plans that offer comprehensive coverage:

• Health Maintenance Organizations (HMO): This plan type typically offers comprehensive coverage with lower out-of-pocket costs but requires policyholders to choose a primary care physician inside of their provided network.
  
• Preferred Provider Organizations (PPO): While offering more flexibility when it comes to providers with comprehensive coverage, PPOs typically come with higher premiums and costs for out-of-network services.

When choosing between HMOs and PPOs, small businesses should consider factors such as the plan's cost, the specific health care needs of their employees, the network of available providers, and the balance between premiums and out-of-pocket costs. Among the most important factors, however, is the inclusion of the essential inpatient and outpatient services that give small business employees a comprehensive array of health care solutions.

For additional guidance, read Choosing the Right Health Insurance Plan for Small Business Owners.

Essential Services for Comprehensive Coverage

Essential coverage can be just that to small business employees: essential. To understand what makes essential coverage a must-have for employees, small businesses need to know some of the different types of inpatient and outpatient services that should be included in their coverage:

Inpatient:

• Hospital Stays: Coverage for room and board in a hospital during treatment
• Surgical Procedures: Operations and surgeries performed in a hospital setting
• Emergency Services: Emergency care that requires hospital admission
• Maternity and Newborn Care: Labor, delivery, and postnatal care in the hospital
• Specialized Care: Intensive care unit (ICU) services, cardiac care units, neonatal intensive care units, etc.
• Diagnostic Tests and Imaging: X-rays, MRIs, and other scans performed during a hospital stay
• Rehabilitation Services: Physical therapy or rehabilitation provided in a hospital after surgeries or injuries

Outpatient:

• Doctor’s Office Visits: Regular check-ups and consultations with primary care physicians or specialists
• Preventive Services: Screenings, immunizations, and wellness checks
• Outpatient Surgery: Surgeries and procedures that do not require an overnight hospital stay
• Prescription Medications: Drugs prescribed for treatment that can be taken at home
• Mental Health Counseling: Outpatient therapy and counseling sessions

This isn’t an exhaustive list of services that can be offered; however, providing employees with a mix of covered services can give them a sense of financial security during difficult times. It also underscores the beneficial nature of the employee-employer relationship. Understanding the coverage details helps businesses make informed decisions, ensuring they select a policy that adequately meets the health care needs of their employees while avoiding unexpected costs or gaps in coverage.

Legal Requirements

Alongside the essential coverage services, employers need to also be aware of the various legal requirements that come with comprehensive health coverage:

• Affordable Care Act Mandates: Small business owners must adhere to requirements related to government-mandated reporting, waiting period and disclosure rules, among others. Learn more about the ACA to find out how your business may be affected.
• Reporting and Disclosure Requirements: Small business employees are entitled to explanations about the health care coverage their employer offers them, so it’s important for small business owners to provide Summary of Benefits and Coverage forms to their employees.
• COBRA Compliance: Employers need to stay informed on how the Consolidated Omnibus Budget Reconciliation Act (COBRA) impacts employees who have been terminated from their positions to ensure that they receive continued health coverage as they search for new employment.
• State-Specific Mandates: Be sure to stay up to date on state-specific rules and qualifications related to applying for small business health insurance. Read more about information specific to Illinois.
• Non-Discrimination Policies: Small business owners cannot discriminate based on race, color, national origin, sex, gender identity, age, sexual orientation, health status or disability when offering health care coverage to its employees.

If the above requirements are not followed, employers risk repercussions such as penalties, fines, increased tax liabilities, and lawsuits.

Conclusion

By understanding the key terms, plan types, essential coverages and legal requirements associated with health insurance plans, business owners and employees alike stand to gain a more complete understanding of the intricate nature of small business health insurance and make the most out of comprehensive coverage plans.

In part 2 of this guide, we’ll discuss how small businesses can evaluate the needs of their employees, talk through several cost management strategies, and outline how employers can educate their employees and better navigate the insurance marketplace.

Visit our Insurance Basics and FAQ pages for more high-level information on health insurance.