3 Types Of Health Insurance Plans Available To Small Business Owners

Posted on: 16 February 2023

Employer-sponsored health insurance can be a valuable tool when it comes to attracting quality employees and retaining skilled staff members. Small business owners can use a health insurance plan to increase their ability to compete with larger companies.

There are many types of business health insurance plans available on the market today. Here are three types of plans that you should consider when investing in health insurance for your small business employees.

1. HMO

Most people have heard of a health maintenance organization (HMO). An HMO is one type of business health insurance plan you may want to consider.

Business owners like the fact that an HMO can help to keep insurance costs low. As long as a covered employee visits a provider or facility that is within the HMO-approved network, an HMO plan can offer predictable costs.

Your employees will be able to enjoy low premiums, affordable deductibles, and fixed copays when receiving medical care.

Consider an HMO business health insurance plan if you want to minimize out-of-pocket costs over time.

2. PPO

A preferred provider organization is referred to as a PPO. A PPO plan offers your employees more flexibility when it comes to selecting a provider.

Unlike an HMO, PPO health insurance plans don't require covered individuals to get a referral from their family physician before seeing a specialist. Your employees will be able to make appointments with the doctors of their choosing and receive care in a facility that they choose as well.

In order to enjoy these freedoms in provider and facility choice, your employees can expect higher monthly premiums, deductibles, and out-of-pocket costs.


A high deductible health plan is able to provide your employers with low premiums. The trade-off is that the cost of any immediate out-of-pocket expenses can be greater with an HDHP.

Many employers choose to pair an HDHP with a tax-free health savings account (HSA). An HSA allows employees to set aside a certain amount of their pre-tax wages into a dedicated account.

The funds in this account can be used to pay for healthcare costs, which helps to minimize the effect higher out-of-pocket expenses can have on an employee's budget.

You will need to weigh both the costs associated with and the benefits provided by each individual plan before selecting a business health insurance plan to cover the employees of your small business.

Work with an experienced insurance agent to identify the best option for your small business. For more information on business health insurance contact a professional near you.