Employers want their employees to have the best health insurance possible. Healthier employees are more productive. And, in today's job market, offering competitive benefits is an excellent way to attract and retain the best employees.

Yet, health care grows more expensive every day. Due to drastic increases in medical costs and insurance premiums, employers have been scrambling to find ways to save money.

This made managed care popular during the 1980s and 90s. Today, employers are hoping that consumer directed programs will create savvy healthcare consumers that use their plans more efficiently.

There are now more health plan options available than ever before. Yet, most people lack the experience and understanding to choose the plan that will best suit their needs.

Types of Health Plans

Several common plan types are offered by employers. Increasingly, employees are being offered more than one option from which to choose.

• Indemnity. This is also called Fee-For-Service (FFS). This was the standard type of insurance which was prevalent until the 1980s. It offers you the most freedom, but has become too expensive for many. If your main priority is being able to choose your physician or hospital, regardless of cost, this is the plan for you.
  

• Catastrophic/Major Medical. This only covers major illness or accident, not preventative care and check-ups. If you're healthy and young, this is a cheap way to have protection. These plans are increasing in popularity as they are coupled with HSA and HRA accounts.
  

• HMO. The oldest type of managed care plan. It focuses on preventative medicine and cost management. It offers the least amount of flexibility and choice. If you require ongoing care or have a family, this is probably your most affordable option.
  

• PPO. Provides some of the freedoms of indemnity combined with the affordability of an HMO plan.
  

• Savings Accounts. HSA, HRA and FSA medical savings accounts allow un-taxed money to be placed in a special account for use towards qualified medical expenses. Some of these accounts are coupled with a catastrophic insurance plan and have financial incentives built-in.
  

Choosing a Health Plan

Health insurance isn't as complicated as it seems. Indemnity and managed care plans have started to converge--so don't make a decision based on a name. Closely examine the coverage being offered. An employer who does their homework will provide you with useful and informative comparison tools, but here are some things to keep in mind:

Examine your overall health care expenditures. Choose a plan that is affordable, but be realistic about how much care, and the type of health care, you will require. Consider the following:

• Do you just want coverage in case something really bad happens?
• Do you mind paying for office visits?
• How much do you spend on health care each year?
• Do you or your family require ongoing medical care and checkups?
• Do you or your family members get colds and flus easily?
  

You might be tempted to choose a plan with a lower premium, like an HSA, but if you require ongoing medical care, you may end up paying thousands more in the end.

Know your needs. Instead of choosing your plan based on a specific type, seek out the best plan for your needs. You might save money on premiums by selecting an HMO plan, but if you can't see the doctor of your choice, it may not be worth it. Likewise, if you know you will need vision, dental or mental health care, it might be worth a higher premium to be sure such services are included.

Check the locations. Make sure the plan you choose offers the services you need, in a location that you can use--when you need it.

Choose a plan with a good reputation. Plans can vary depending on location and employer. So, even if you had a great HMO at your last employer, don't automatically assume your new employer's HMO will work just as well for you. Review the services offered, talk to other employees and check consumer resources to see how the plan has been rated.