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What are the Different Types of Employee Health Benefits?

By Jeremy Laukkonen
Updated: May 17, 2024

Employee health benefits can vary widely between companies and jurisdictions. In some countries health coverage takes the form of a single payer system, and in other places there are government regulations that dictate coverage levels. If a jurisdiction has legal minimums, a company may still offer coverage above and beyond that level. Benefits may include major medical coverage, preventative care, alternative medicine, and addiction recovery services. Other employee health benefits may include dental coverage, vision coverage, and prescription drug plans.

In countries that do not have a single payer health system, employers commonly subscribe to group health insurance plans. Depending on the size of the company, the employees all receive the same plan or may be able to choose different levels of coverage. Some companies pay in full for their employee health benefits, while others require that the employees pay for a portion of the coverage. Other companies require that their employees pay into the plan if they want coverage for their spouse or children. Government regulations may prevent this type of situation, though many laws that apply to large companies are not applicable to small businesses with under a certain number of employees.

The most common employee health benefits relate to major medical or preventative care. Common plans allow for a certain level of coverage for injuries and illnesses in addition to a number of yearly preventative visits to the doctor. In the United States, businesses with 25 or more employees are required to offer access to a health management organization (HMO) in addition to traditional health plans. Employee health benefits received through an HMO are typically limited to the doctors and other professionals that are members of the organization and require the authorization of the individual's primary care physician.

A number of other employee health benefits may also be offered. Prescription drug plans are often included with both traditional health insurance and HMOs. These plans allow the employee to obtain prescription drugs for a small copayment instead of the full price of the medication. Expensive plans typically have a small copayment and allow the prescription of any name brand drugs. Less expensive plans often place drugs into tiers with different copayment levels and may not offer any assistance when buying certain name brand drugs if a generic alternative is available.

Vision and dental plans are also offered by some employers. These health benefits typically allow for one or more yearly visits and may also pay for items such as eye glasses, contacts, and orthodontic work. Some health plans include vision and dental options, though these types of health benefits are often obtained separately.

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