How Many Health Insurance Options Do Employees Really Need?

Two health insurance options are usually sufficient for most start-up organizations. Give employees a choice between a health maintenance organization (HMO) and a preferred provider organization (PPO).

Although HMO and PPO monthly premiums are roughly the same, each plan has fundamental

differences that can influence an employee's choice. HMOs have lower out-of-pocket costs and no deductibles as long as you use providers in the HMO network. PPOs have deductibles but offer more flexibility than HMOs, allowing you to choose from a wider selection of doctors and specialists outside of the PPO network.

Allowing employees to choose between an HMO and a PPO gives them the freedom to pick the plan that best suits their needs. It also shows them that you care enough about their individual situations to provide them with two different health insurance options.