Why buy Health Insurance for employees in the USA?
Let’s start with the hard reality!
The US healthcare system is renowned for being one of the most expensive and difficult to navigate in the world. Unlike in the UK, there is no such thing as universal access to free healthcare. In fact, only a tiny percentage of people qualify for some form of free healthcare. That’s why over two-thirds of the US population has private health insurance, and the majority of those receive it from their employer.
Without health insurance the costs of medical treatments in the US can be astronomical. A study by the National Institute for Health found the average cost of an ER visit (A&E in our language!) is $1,900 to $2,100. But this varies depending on the kind of medical emergency you are in, so you might pay a lot more or less.
If you’re a business operating in the USA, employees will almost certainly expect you to provide some kind of health coverage. In some cases, a company will even be legally required to provide health insurance to its employees. Under the Affordable Care Act (ACA), companies with 50 or more full-time employees must provide health coverage to full-time employees and dependents under the age of 26 or pay a fee.
In summary: even if you are not legally required to provide health insurance to your employees in the US, staff will be expecting it, so it’s highly recommended that you do. And hey, it’s the right thing to do too!
Hooray Health & Protection is here to advise you about the US market without charging you for the privilege. With the right support and assistance you can find the right plan for your business.
What’s typically covered in a US Health Insurance scheme?
As with any healthcare scheme, this will vary from policy to policy. The more you are willing to invest, the more features will be included in the plan. But under the Affordable Care Act, insurers are required to offer a number of essential services, including:
- Emergency care and treatment
- Lab tests
- Maternity and newborn care
- Mental health and substance abuse treatment
- Outpatient care (doctors and other services you receive outside of a hospital)
- Prescription drugs
- Paediatric services, including dental and vision care
- Preventive services (e.g., some immunisations) and management of chronic diseases
- Rehabilitation services
Each insurer will provide a range of plans, usually categorised as a metal element: bronze, silver, gold and platinum. Each more expensive than the last and rising in its scope of coverage.
The cheapest plan is not always the best value, however. For example, the lower the premium (initial cost of buying the insurance), the more you’ll likely need to pay out when a claim is made. This is because you’ll need to pay more towards the cost of a treatment than you would if you had a more comprehensive plan.
As you can see, it’s tricky to calculate what insurance plan offers the best value longer term. A good US health insurance broker will ensure your budget is ideally spent and doesn’t leave you with nasty surprises further down the line.
Would you like a free fact-find with an expert US health insurance broker? Hooray’s international team will guide you through the basics of the US health system before connecting you with a US broker you can trust. Call 01273 222805 or email [email protected].
How much does US Business Health Insurance cost?
It’s very hard to provide a useful estimate as prices fluctuate massively depending on a variety of factors, including the number of employees, the health profile of your employees and the US state you’re located in. The latter has a huge impact. For example, the cost of buying health insurance in New York could be double what you’d pay in California.
According to financial analysts, ValuePenguin, the average of cost of healthcare in the US is $560/month.
What’s the best way to buy US Health Insurance?
There are two main ways of buying US health insurance:
- Opt for an insurance plan which complies with Government standards, known as “Obamacare” or Affordable Care Act plans
- Select short-term plans offered by insurers
Short-term plans provide health coverage from a few months, up to a year. Because they are not Government regulated there is no minimum requirement in terms of features included in the plan. They are often used as stop gap for employees who are between jobs.
Most businesses will be looking to invest in an insurance plan regulated by the Affordable Care Act. Under this, there are four main options:
- Preferred Provider Organizations (PPO): allows members (i.e. employees) to visit doctors inside and outside of the insurer’s network. However, the costs for specialists outside of the network might be higher. Employees can visit any doctor without a referral.
- Point of Service Plan (POS): allows employees to visit doctors inside and outside of the insurer’s network. However, there will be higher costs for out-of-network specialists. Members will need a referral to visit providers that are outside of their network.
- Health Maintenance Organizations (HMO): covers healthcare services provided by specialists and hospitals in the network. Out-of-network access is limited to emergency services. Employees will usually require their primary doctors to refer them to specialists.
- Exclusive Provider Organizations (EPO): covers healthcare services provided by specific specialists and hospitals that are a part of the network. Out-of-network access is unavailable.
Who are the best US Health Insurance providers?
There are hundreds of providers to choose from, but the biggest names in the states include:
- UnitedHealth Group
- Blue Cross Blue Shield
- Kaiser Permanente
- Oscar Health
A note of caution: just because these are the biggest US health insurers it doesn’t necessarily mean they have the right policy for your company. At Hooray Health & Protection we can connect you with an impartial US expert who will compare and contrast different policies which fit the needs of your business.
Do I need a broker to buy US Health Insurance?
In short, yes. In the US, you have to be licensed to buy group healthcare products and you need to be acquainted with the insurer, therefore, unless you have someone in-house with the appropriate licensing and expertise; you’ll have to find someone externally.
There are two other alternative methods: joining a Professional Employer Organisation (PEO) or joining an Association Health Plan (AHP).
Professional Employer Organisations (PEO):
A PEO arrangement involves hiring a technology company to handle payroll, HR, and employee benefits. While it can be a useful way of offloading a lot of HR tasks, it can be very expensive. The other downside is that there is no ability to shop around and explore the wider health insurance market – it’s all provided for you.
Association Health Plans:
An AHP allows businesses to join with other businesses (perhaps of the same industry and/or location) to create a larger pool of employees and therefore benefit from the group discount this enables. Businesses must pay a membership fee, and, as with a PEO arrangement there is no wriggle room. You get what you’re given!
This begs the question: is it best to employ a broker, invest in a PEO or join an AHP? The best first stop is to speak to a broker as they can talk you through all options without charging you a penny. A PEO or AHP, on the other hand, will only advise about the services they offer.
A good US broker is not only licensed and appointed with each insurer, but they can go to any carrier out there and show you all your options and, depending on the size of the employer, can customize benefits for you too.
How can Hooray Health & Protection can help?
The friendly team at Hooray can do all the heavy lifting for you. Health insurance is complex at the best of times, but US healthcare takes things to a whole new level! Legislation varies from state-to-state and providers offer a wide variety of schemes aimed at different businesses sizes.
Our team of global experts is led by Ian Abbott, formerly of Bupa Global and includes former industry insiders from Aetna and Metlife.
By speaking to an expert broker you can:
- Get every single question you ever wanted to ask about US health insurance answered! Our expert US contacts will answer everything in simple language
- Get advice on the best course of action related to your business, whether you’re a one-man band, start-up or SME
- Get quotes delivered from insurers, ensuring that the best deal is delivered to you
- Get help with insurance claims and disputes
- Get annual reviews of your insurance scheme to ensure you continue to get the best value for money
- Get all of the above free of charge
If you’d like to get free advice and assistance right now, then contact our team on 01273 222805 or email [email protected].
Do companies in the US pay for health insurance?
Yes, many companies buy health insurance for their employees. In fact, it’s the most common way that US citizens access health coverage. In most cases an employee will pay something towards their health insurance but, as of 2023, it can’t be more than 9.12% of their income. Most commonly, an employer will cover anywhere between 75% and 100% of the premium.
Can employee health insurance also cover families?
Yes. Immediate family members are often added to the health insurance policy. This means they can benefit from more cost-effective premiums. It can be a significant cost for businesses, which is why many companies will deduct the amount in full from the employee’s salary – in essence, this means the employee pays for it.
What happens if an employee doesn’t have US health insurance?
Although they will be treated, they will be charged thereafter. And the costs can be colossal. Hence, health insurance is highly advised.
What options are available for small businesses?
Insurers are legally required to provide health plans for companies with two employees or more, so there is plenty of choice for smaller companies. But whether schemes remain within your budget is another matter!
How can self-employed get covered in the US?
Business owners can apply for health insurance through the ‘Health Insurance Marketplace’, a resource dedicated to helping individuals, families and small families. You might even qualify for premium tax credits and other insurance reductions.
Free or low-cost coverage may also be possible via the Children’s Health Insurance Programme (CHIP) or Medicaid programs in your state. Company owners can also insure their children and spouses.
Is international health insurance an option?
Yes, it may be worth buying a global health plan if you have employees in more than one country. Through such a scheme, you can cover all employees in all locations, in one policy. However, US health insurance is often excluded in international healthcare policies (due to its complexity), but there are options available.
Can I get free healthcare in the US?
Only in exceptional cases will an individual qualify for free healthcare: those earning beneath a certain income level and those over a certain age. And even then, it’s often limited to inpatient care (care that typically requires an overnight stay) as opposed to check-ups and scans.