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Group medical insurance is an employee benefit that pays the cost of hospital care, doctor and surgeon fees, and related medical expenses. These plans provide financial security to employees and their families.

Sources of Group Medical Insurance

Managed medical care insurance with SBIGroup medical insurance is available from a number of sources:

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  • Commercial insurers
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  • Blue Cross and Blue Shield plans
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  • Managed care organizations
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  • Self-insured plans by employers

Traditional Plans of Group Medical Insurance

Group medical insurance for employees has two traditional plans:

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  1. Basic medical expense insurance – A generic name for group plans that provide only basic benefits. The benefits are enough to pay routine medical expenses but generally are not designed to cover catastrophic loss.
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  3. Major medical insurance – It is designed to pay a high proportion of covered expenses of a catastrophic illness or injury. It is a supplement to a basic medical expense insurance plan and thus forms a comprehensive major medical policy.

Managed Medical Care Plans

Managed medical care insurance is a generic name for medical expense plans that provide covered services to the members in a cost-effective manner. Under managed medical care plans, the employee’s choice of physicians and hospitals may be limited to certain health providers. Also, cost control and cost reduction are heavily emphasized under these plans. The quality of care provided to individuals under a medical care plan is carefully monitored and tested.

There are three main types of managed care plans:

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  1. Health maintenance organizations (HMOs) – an organized system of health care that provides comprehensive medical services to its members on a pre-paid basis.
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  3. Preferred provider organizations (PPOs) – a plan that contracts with health-care providers to provide medical services to the members at reduced fees. The insurer, employer, and/or other grroup negotiates contracts with physicians, hospitals, and other care providers to provide services at discountes rates. Deductibles and copayment charges are reduced to encourages patients to use PPO providers.
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  5. Point-of-service (POS) plans – Structured like an HMO, however, members are allowed to go outside the network for medical care. If a member of the care plan goes to a provider outside the HMO, they pay a substantially higher deductible or copay for the visit. If the provider is inside the HMO plan, the member pays little or nothing out of pocket for the visit.

Managed medical care plans generally have lower hospital and surgical utilization rates than traditional plans. Plan members also pay substantially lower out-of-pocket costs if using network providers and do not have to file claim forms.

Consumer-Directed Health Plans (CDHP)

Doctors and managed care plansconsumer-directed health plan (CDHP) is an arrangement that gives employees a choice of health-care plans designed to make them more sensitive to health-care costs, provide a financial incentive to avoid unnecessary care, and seek out out low-cost health care providers. CDHP plans are split into (1) defined contribution health plan and (2) high deductible health plans.

With the skyrocketing of health care costs and Health Reform Act, employers are placing heavy emphasis on controlling their health-care costs. Large employers are using health risk assessments on their employees and even providing special health insurance programs based on the results. Employers are also provide financial incentives to employees that participate in health management programs such as weight reduction, giving up smoking, and exercising on a regular basis.

How can SBI be of assistance with your employee benefit plans?

An SBI broker wants to sit down with you to discuss your plans for managing your company’s employee health risk and medical insurance. Give us a call at 1-(800)-659-5733 or request a consultation today at our Washington or Union, MO office here.

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