Offering group health insurance isn’t just a smart way to attract and retain top talent; it’s often the backbone of a strong employee benefits package. In Arizona’s competitive job market, having the right coverage in place can set your business apart and help you build a healthier, more loyal team.
But when it comes to group health insurance, the number of options can be overwhelming. How do you choose the right plan for your employees and your budget? Whether you’re a small business in Scottsdale or a growing company in Flagstaff, here’s what you need to know about your group health insurance options.
What Is Group Health Insurance?
Group health insurance is a single policy offered to a group, usually employees of a company, that provides medical coverage to members and, often, their dependents. These plans are generally more affordable than individual policies because risk is spread across the group, and employers often share the cost of premiums.
HMO (Health Maintenance Organization) Plans
How it works: HMO plans require members to choose a Primary Care Physician (PCP) and get referrals for specialist care. Coverage is limited to in-network providers, which helps keep costs predictable.
Pros:
- Lower monthly premiums and out-of-pocket costs
- Focus on preventative care
- Streamlined, coordinated services
Cons:
- Limited provider network
- Must stay in-network for coverage (except emergencies)
- Best for: Businesses prioritizing affordability and willing to work within a local network.
PPO (Preferred Provider Organization) Plans
How it works: PPO plans offer greater flexibility, allowing members to see any doctor without a referral. There’s a larger network of providers and partial coverage for out-of-network care.
Pros:
- Flexibility to see any doctor
- No referrals needed for specialists
- Large provider network
Cons:
- Higher premiums and deductibles
- More complex claims process
Best for: Employers with employees spread across Arizona or those who value choice in healthcare providers.
EPO (Exclusive Provider Organization) Plans
How it works: EPOs are similar to HMOs in that they only cover in-network care, but like PPOs, they typically don’t require referrals to see specialists.
Pros:
- Lower premiums than PPOs
- No referral requirements
- Moderate provider network
Cons:
- No out-of-network coverage (except emergencies)
Best for: Businesses looking for a balance between cost and provider flexibility without needing referrals.
POS (Point of Service) Plans
How it works: A hybrid between HMO and PPO, POS plans require a PCP and referrals, but also offer partial out-of-network coverage.
Pros:
- Access to out-of-network care (with higher costs)
- Lower premiums than PPOs
- Focus on coordinated care
Cons:
- More paperwork for out-of-network claims
- PCP and referrals still required
Best for: Companies that want to offer both cost control and some flexibility.
High-Deductible Health Plans (HDHPs) with HSAs
How it works: HDHPs have lower premiums but higher deductibles and can be paired with a Health Savings Account (HSA) for tax-free savings on medical expenses.
Pros:
- Lower monthly premiums
- Employees can save pre-tax dollars for care
- HSAs are portable and grow tax-free
Cons:
- Higher out-of-pocket costs until deductible is met
- Not ideal for employees with frequent healthcare needs
Best for: Younger or healthier teams looking for budget-conscious options with long-term savings potential.
Self-Funded or Level-Funded Plans
How it works: In a self-funded plan, the employer assumes the financial risk for providing healthcare. Level-funded plans are a middle ground with set monthly costs and stop-loss insurance to protect against big claims.
Pros:
- Customizable plan design
- Potential cost savings for healthy groups
- Greater control over benefits
Cons:
- Financial risk if claims are higher than expected
- Requires more administrative oversight
Best for: Medium to large businesses with predictable healthcare spending and a desire for plan customization.
How to Choose the Right Option
Choosing the best group health insurance plan depends on your company’s size, budget, and the needs of your team. Here are some steps to guide your decision:
- Survey your employees to see what they value most in a plan (cost, choice of doctors, out-of-pocket expenses, etc.)
- Set a benefits budget and determine how much you’ll contribute toward premiums
- Consult a licensed insurance broker (like our team at J.C. Lewis Insurance Services) who can help you compare options from top carriers in Arizona
Why Group Health Insurance Matters in Arizona
Arizona employers have a wide range of group health insurance choices, but the landscape is always evolving with new carriers, regulations, and trends. Partnering with a knowledgeable broker can make a huge difference.
At J.C. Lewis Insurance Services, we help Arizona businesses navigate the complexities of group coverage. From understanding plan types to staying compliant and keeping costs under control, whether you have five employees or 500, we’ll guide you every step of the way.
Let’s find the right health plan for your team. Reach out to schedule your free consultation today.
