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The Empuls Glossary

Glossary of Human Resources Management and Employee Benefit Terms

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Employee Health Insurance

Employee health insurance is a crucial benefit provided by employers to their employees, aiming to ensure their well-being and mitigate financial risks associated with healthcare expenses. This insurance coverage typically includes medical, dental, and sometimes vision benefits, depending on the specific plan offered by the employer.

Who is eligible for employer employee insurance?

Eligibility for employer-sponsored health insurance typically depends on factors such as employment status (full-time, part-time), length of employment, and sometimes other criteria set by the employer. Generally, full-time employees are more likely to be eligible for health insurance benefits, although part-time employees may also qualify under certain circumstances.

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What are the different types of health insurance plans?

The different types of health insurance plans include:

  • HMO (Health Maintenance Organization): HMO plans typically require members to choose a primary care physician (PCP) and obtain referrals for specialist care. These plans often offer comprehensive coverage but have restricted provider networks.
  • PPO (Preferred Provider Organization): PPO plans offer more flexibility in choosing healthcare providers and do not require referrals for specialist care. While premiums may be higher than HMOs, PPOs provide greater freedom in accessing care both in and out of network.
  • EPO (Exclusive Provider Organization): EPO plans combine elements of HMOs and PPOs, offering a limited network of providers like an HMO without requiring referrals for specialist care. EPOs typically do not cover out-of-network care except in emergencies.
  • HDHP (High Deductible Health Plan): HDHPs feature higher deductibles and lower premiums, making them attractive options for cost-conscious individuals. These plans are often paired with HSAs to help offset out-of-pocket expenses.
  • Medical services: Coverage for medical services includes doctor visits, hospital stays, surgeries, and other medically necessary treatments.
  • Prescription drugs: Health insurance plans may provide coverage for prescription medications, either through a formulary or with copayments or coinsurance.
  • Mental health services: Many health insurance plans now cover mental health services, such as therapy, counseling, and psychiatric care.
  • Preventive care: Preventive care services, such as annual check-ups, vaccinations, and screenings, are often covered at no cost to the insured to encourage early detection and prevention of health conditions.

What are the different types of cost-sharing plans for health insurance?

Health insurance plans typically require cost-sharing between the insurer and the insured, including:

  • Premiums: The monthly or annual cost of maintaining coverage.
  • Deductibles: The amount individuals must pay out-of-pocket before insurance coverage kicks in.
  • Copayments: Fixed amounts paid for specific services, such as doctor visits or prescription medications, often due at the time of service.

Understanding these cost-sharing components is essential for employees to make informed healthcare utilization and budgeting decisions. Employers can offer resources and support to help employees navigate these costs effectively.

What is covered in employee health insurance?

Employee health insurance plans vary in coverage, but they typically include essential medical services such as doctor visits, hospital stays, emergency care, prescription drugs, and preventive care. Dental and vision coverage may also be included or offered as optional add-ons.

Which is the best health insurance for employees?

The best health insurance for employees depends on individual needs, preferences, and budget constraints. Employers often offer a selection of health insurance plans for employees to choose from, ranging from traditional fee-for-service plans to managed care options like Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs). The best plan for an employee may be determined by factors such as cost, coverage network, quality of care, and additional benefits offered.

How to evaluating and benchmarking employee health insurance plans

To benchmark and evaluate the employee health insurance plans, you need to:

  • Assess plan effectiveness and employee satisfaction: Evaluating the effectiveness of your company's health insurance plans is crucial for ensuring employee satisfaction and overall well-being. Regular assessments should be conducted to gauge coverage adequacy, access to healthcare providers, and satisfaction with customer service.
  • Benchmark against industry standards: Benchmarking your health insurance plans against industry standards allows you to assess how competitive your offerings are in attracting and retaining talent. Compare coverage options, premiums, deductibles, and network access with similar companies in your industry to ensure your plans remain competitive and attractive to prospective employees.
  • Feedback mechanisms and surveys: Implementing feedback mechanisms and conducting regular employee surveys help understand their evolving healthcare needs and preferences. This feedback can provide valuable insights into areas needing improvement, whether expanding coverage options, enhancing wellness programs, or improving access to healthcare services.

Employee pulse surveys:

These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).

One-on-one meetings:

Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.


eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.

Based on the responses, employees can be placed in three different categories:

  • Promoters
    Employees who have responded positively or agreed.
  • Detractors
    Employees who have reacted negatively or disagreed.
  • Passives
    Employees who have stayed neutral with their responses.

How to manag costs and controlling expenses for employee health insurance?

Follow the steps below to manage the costs for employee health insurance:

  • High-deductible health plans (HDHPs) with Health Savings Accounts (HSAs): Offering HDHPs with HSAs can empower employees to take more control over their healthcare spending while providing a tax-advantaged way to save for medical expenses.
  • Wellness programs and preventive care: Investing in wellness programs and preventive care initiatives can lead to long-term cost savings by promoting healthier lifestyles and reducing the incidence of costly chronic conditions.
  • Telemedicine and virtual care options: Embracing telemedicine and virtual care options can provide cost-effective alternatives to in-person doctor visits, reducing unnecessary healthcare expenses and improving access to care, especially for remote or busy employees.
  • Negotiating with insurance carriers and providers: Negotiating with insurance carriers and healthcare providers can help secure more favorable rates and terms for your company's health insurance plans. By leveraging your company's purchasing power and exploring alternative reimbursement models, you can mitigate rising healthcare costs and ensure the affordability of coverage for both the company and its employees.
  • Employee education on healthcare costs and consumer choices: Educating employees about healthcare costs and consumer choices empowers them to make informed decisions about healthcare utilization. Resources such as cost comparison tools, educational seminars, and personalized assistance can help employees navigate the complexities of the healthcare system and optimize their benefits while controlling costs for themselves and the company.

How much does health insurance cost per employee?

The cost of health insurance per employee can vary significantly based on various factors such as the size of the company, the level of coverage provided, the location of the company, the age and health status of employees, and the chosen insurance provider. On average, employers contribute a substantial portion of the premium costs, with employees also typically sharing in the expense through payroll deductions.

Is employee health insurance tax-deductible?

Yes, generally, employee health insurance premiums are tax-deductible for employers as a business expense. This means that the money spent on providing health insurance coverage to employees can be deducted from the employer's taxable income, thus reducing their tax liability.

Is health insurance tax-deductible for employees?

Health insurance premiums paid by employees are often tax-deductible, but this depends on the specific tax laws of the country or region and the employee's individual circumstances. In many cases, employees can deduct their health insurance premiums if they itemize deductions on their tax returns, subject to certain limitations and thresholds.

Is employee insurance mandatory?

In many jurisdictions, employers are not legally required to provide health insurance to their employees, unless mandated by specific laws or regulations. However, in some countries, such as the United States, there may be requirements under the Affordable Care Act (ACA) for certain employers to offer health insurance coverage to their full-time employees or face penalties.

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