Jill loves her job and the team of teachers and staff who make her Montessori School in Austin one of the best options for young kiddos. But as her school has grown, she realizes she needs to offer health insurance to keep her employees happy and attract new hires.
The problem is it is expensive.
Jill has been researching her options and discovered an HMO plan that saves money but comes with strict network rules, and a PPO plan that gives her employees more freedom but costs much more. Being budget minded, she doesn’t want to spend more than she has to, but she also doesn’t want her teachers to struggle with limited healthcare service options.
This is a dilemma that many business owners across Texas struggle with when looking at health insurance plans. She needs to figure out whether saving money with an HMO is worth it, or if the plan costs of the PPO is a better long-term choice.
Jill quickly notices that the HMO plan is cheaper. HMO stands for Health Maintenance Organization and it means that her team members will only be covered for in network care. The monthly premium is lower, which would help her keep costs under control, and her employees would also have lower co-pays and deductibles. She likes the idea of lower costs for medical care for both her and her staff.
The downside? They have to stick to a strict selection of network providers or risk paying for care as a completely out of pocket cost. With an HMO, employees can only see in-network providers. If they want to visit a specialist, they need a referral from a primary care physician first. That could mean extra appointments, longer wait times, and fewer choices.
Jill wonders if her teachers and staff will be okay with these rules, or will they be frustrated by the lack of flexibility? She needs to weigh the savings against the potential inconvenience of always starting with a primary care physician and using in-network care.
This made her take a closer look at the PPO Option and see if it’s worth the extra cost.
Unlike an HMO, a PPO plan lets employees see almost any doctor they want. They incentivize using their preferred provider network of doctors, but do allow use of out of network providers. The PPO also allows them to see specialists without referrals, which makes it easier to get more specialized care without jumping through hoops.
Jill can already imagine some of her teachers preferring this option. One of her longtime employees, Sarah, has been seeing the same doctor for years. If Jill chooses an HMO, Sarah might not have network coverage with this doctor, which could be frustrating and expensive. With a PPO, she can keep seeing the doctor she trusts with greatly reduced out of pocket costs.
The downside is that PPOs come with higher monthly costs. Jill notices that the monthly premiums are much higher than the HMO plan she was looking at. Plus, employees will have higher annual deductibles and co-pays, meaning they’ll have more out of pocket expenses before their insurance kicks in for covered services.
Jill likes the idea of giving her staff more freedom, but she also has to consider whether the extra out of pocket cost is worth it for her school’s budget.
She wonders if there’s a way to balance costs and employee needs. This brings her to another important factor which is the availability of doctors and hospitals found in network coverage.
Jill realizes that where her teachers live and work matters when choosing between an HMO and a PPO. Since she’s in Austin, there’s a good chance that the HMO will have a larger network that will have plenty of options for doctors and hospital care. If all her teachers live near the school, an HMO could work just fine.
But what about her assistant director, Mark? He lives outside of Austin in a smaller town. If Jill picks an HMO, Mark might not have enough in-network doctors nearby. That could mean longer drives just to see a physician or higher medical expenses due to no network care coverage.
Jill realizes that if most of her employees live in the city, an HMO can work well if the network coverage is broad enough. But if some of them use primary care doctors in smaller communities, a PPO might be the better choice.
At this point, she’s feeling torn. She wants to save on health care costs, but she also wants her employees to be happy with their benefits. All of this leads her to the final question. How can she choose a plan type that can keep her staff happy and support her business in the long run?
Jill knows that if her teachers aren’t happy with their health plan, it could cause problems later if other schools offer a significantly better benefits package.
If she picks the HMO just to save premium cost, her employees can become frustrated with the limited choice of providers. That can hurt morale and her best teachers might start looking for jobs at schools that offer better benefits.
On the other hand, choosing a PPO means higher annual premiums, and Jill has to think about her budget. She doesn’t want to spend more than she has to, but she also doesn’t want to lose great employees over health insurance coverage.
Striking a balance and finding a plan that keeps costs manageable is the key. She wants to give her teachers access to a great quality of care.
At this point, Jill decides it’s time to talk to an expert—someone who understands Texas group health insurance options and can help her compare types of health plans based on her budget and her employees’ needs.
Jill started this journey feeling worried about the price, but now she understands that there’s more to the decision than just her cost of premiums. She reached out to the Insurance For Texans since they are experienced in helping small businesses in Texas find the right insurance plan for their situation.
Jill knew that she needed help determining if the narrower networks of HMO plans can still work or if the extra cost of the PPO was worth if for more flexibility and better access tho health care.
She also realizes that there are other ways to make coverage affordable, such as exploring non-traditional options like level-funded plans, catastrophic health plans, or self-funded group plans.
If you’re a small business owner like Jill and need help choosing the right health plan, click the button below to start the conversation. Let’s find a plan that fits your budget and supports your employees.