The provider is under contract with the insurer to provide discounted medical service. An insured individual must see a physician or be admitted to a hospital in the HMO network to have costs covered. HMOs are becoming the preferred health insurance programs of businesses because of the ability to control rising costs. Few employers pay the entire premium for health insurance. Many employers pay only a part of health insurance and let the employees pay for the remaining amount.
Employees often value the insurance more if they are aware of the cost.
Be sure employees understand who is eligible for health insurance, when the insurance begins, what portion of the insurance is paid by the business, where employees can go to get additional information about coverage, and what happens if an employee elects not to take health care coverage. Premiums paid by employers on employee health and accident policies are not taxable income to employees. Further, the portion of an employee's salary used to pay premiums for health insurance which is offered as part of a qualified cafeteria plan is also excluded from the employee's taxable income. Reimbursement for medical bills by an employer will be income to the employee unless the plan is nondiscriminatory, ie. Having formal leave policies are important to employees.