What Healthcare Benefits Should You Cover for Employees?

Editor's Note: Take a look at our featured best practice, HR Strategy: Job Leveling (26-slide PowerPoint presentation). Job Leveling is a disciplined approach to gauge the value of work for individual positions across the organization. It entails ascertaining the nature of work done by each position, authority levels, and the effect of each job on business results. Jobs that are configured inadequately bread [read more]

Also, if you are interested in becoming an expert on Human Resource Management (HRM), take a look at Flevy's Human Resource Management (HRM) Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

* * * *

If you are an employer, it can be challenging to know what healthcare benefits you should provide your employees. To help make things a little clearer, check out the following insightful overview.

Types of Healthcare Plans

Before looking at the healthcare benefits you should cover for your employees, you first need to know about the type of health insurance plans that are available. Plans for employees are commonly known as group insurance plans. They are typically paid on a monthly basis. The premiums are based on specifics like your location, the number of employees you cover, and the ages of those employees. The most common healthcare insurance plans for employees are:

• Preferred Provider Organization. A PPO plan is the most lenient plan type but it also tends to contain the most expensive premiums.
• Health Maintenance Organization. An HMO plan has lower monthly premiums but employees require primary care physician referrals for special services.
• Exclusive Provider Organization. An EPO plan only pays for services from a list of selected providers.

While you may be tempted to go with the cheapest type of plan, you should avoid doing so before you look into the specific details and compare each option. Filtering through insurance policies can take up a lot of time, though. However, you can save time by using the Policy Scout website to filter policies according to your needs.

Legal Requirements

Under the 2010 Affordable Care Act, if you employ over fifty employees, you are lawfully required to provide health insurance to your workers. If you have under fifty employees, you need to make the decision as to whether to offer healthcare benefits to your employees or not. It is highly recommended that you do provide benefits if you have under fifty employees. Not only will it benefit your workers. It will also enable you to attract and retain the best talent. Furthermore, the government provides various incentives to make it easier.

The Benefits You Should Consider Covering

The exact nature of the healthcare insurance policy you get can determine the precise benefits available to your employees. Here are some of the primary benefits that are covered by healthcare plans:

• Treatment for illnesses, diseases, or accidents.
• Medical, surgical, therapeutic, or emergency care.
• Inpatient and outpatient treatments.
• Prescription drugs.
• Nursing services.
• Diagnostic care, which includes MRIs, blood tests, and x-rays.
• Pregnancy and childbirth expenses.
• Specialty care, such as the services provided by the Cardiac Care Unit or the Intensive Care Unit.
• Mental health services.
• Substance abuse services.

Coverage Eligibility for Different Ages

You could place minimum and maximum age limits on healthcare plan eligibility so you can keep costs down. The decision should be based on your personal business circumstances and the exact nature of the insurance policy you decide on. While there is no law with regards to minimum and maximum ages, many employers choose a minimum age of 18 for employee coverage. Coming up with a maximum age is a little trickier, as you do not want to cause age discrimination. However, a general rule of thumb, if you do decide to impose a maximum age limit, is to provide healthcare benefits to employees up to the age of 65.

Want to Achieve Excellence in Human Resource Management (HRM)?

Gain the knowledge and develop the expertise to become an expert in Human Resource Management (HRM). Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

The purpose of Human Resources (HR) is to ensure our organization achieves success through our people. Without the right people in place—at all levels of the organization—we will never be able to execute our Strategy effectively.

This begs the question: Does your organization view HR as a support function or a strategic one? Research shows leading organizations leverage HR as a strategic function, one that both supports and drives the organization's Strategy. In fact, having strong HRM capabilities is a source of Competitive Advantage.

This has never been more true than right now in the Digital Age, as organizations must compete for specialized talent to drive forward their Digital Transformation Strategies. Beyond just hiring and selection, HR also plays the critical role in retaining talent—by keeping people engaged, motivated, and happy.

Learn about our Human Resource Management (HRM) Best Practice Frameworks here.