Health Insurance Plan for Organization

Health insurance is a key benefit that employees expect their employer to provide them
with. Even though it constitutes significant cost to the employer, providing health insurance to
employees can help a business to attract and retain top talent. Additionally, depending on the size
of the organization, providing health insurance to employees can also be a legal requirement.

Suggestion of Health Insurance Plan for Employees

For a business organization with fifty employees, the healthcare plan that I would suggest
is Health Maintenance Organization (HMO). HMO is one of the most common health insurance
structures in the market. It involves provision of health coverage through a network of healthcare
providers (Falkson & Srinivasan, 1). Members can only receive medical care through healthcare
providers and physicians that are under the HMO contract. To receive care from physicians and
healthcare providers outside the contracted network of providers, one needs to receive referral
from their primary healthcare provider within the network (Falkson & Srinivasan, 1). The main
advantage of this insurance scheme is that premiums are relatively low. There are two key
factors that help in reducing the cost of HMO schemes. One, the fact that it involves insurance of
a large number of people significantly reduces the costs. Individual plans are generally more
expensive than group plans. Secondly, restrictions placed on HMO members keep members from
seeking costly care from other providers (Falkson & Srinivasan, 1). Apart from low costs
resulting from large member numbers and restrictions on providers that members can receive
care from, HMO also provides organizations with an opportunity to lower their insurance costs

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through adopting preventive measures. These measures include establishment wellness programs
for employees that, among other things, promote healthy lifestyles among employees.

Implications of Affordable Care Act on Decision to Purchase Health Insurance

The Affordable Care Act was signed into law in 2010 with one of its goals being
increasing the number of people with health insurance coverage. One of the requirements of the
Affordable Care Act is that all organizations that have more than fifty employees buy health
insurance cover for at least 95% of their full-time employees (Gallman, 2). Organizations that
fail to adhere to this rule face stiff penalties that can be as high as $4,000 per year for every
employee that has not been insured by the organization (Gallman, 2). Apart from the penalties,
the Affordable Care Act also provides incentives for small businesses with fifty or less full-time
employees to provide their employees with health insurance cover. Through the Small Business
Health Options Program (SHOP), small business that provide their employees with health
insurance cover may qualify for Small Business Health Care Tax Credit (Gallman, 2). The
decision to purchase health insurance for employees was, therefore, due to penalties for not
purchasing one and incentives of purchasing one.

Even though the Affordable Care Act requires businesses to provide their employees with
health insurance cover, businesses themselves benefit from providing such cover as opposed to
the government providing the cover. One of these benefits is that businesses can use insurance
cover benefits to attract and hold on to talented employees. Another one is that employer-
provided care allows businesses to choose quality healthcare providers for their employees thus
allowing them to enjoy better health outcomes. Despite these benefits, employer-provided health

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insurance also has some disadvantages when compared to government-provided care. First, they
are costly to employers. Secondly, they require a lot of paperwork which takes away valuable
time and resources from the core business of the organization.

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Source List

1. Samuel Falkson and Vijay Srinivasan. 2020. “Health Maintenance Organization (HMO).”
   In StatPearls Publishing
2. Sean Gallman. 2016. Influence of the patient protection and affordable care on small
   businesses.