The beginning of the year is approaching, meaning it's open enrollment time for most employers. Almost half of Americans get health coverage through their employer, and there are usually several options offered, so choosing a plan can get a little overwhelming. Each plan is designed to meet different needs, so how do you know which is right for you? We've listed the most common below and briefly described each to help you make the best choice for you and your family.
Preferred Provider Organization (PPO)
This type of health plan comes with a network of doctors, hospitals, and other providers who have agreed to charge less for plan members. Premiums and deductibles are usually higher because of the flexibility you get in choosing providers. Generally, with a PPO, you do not need a referral from your primary care provider when you want to see a specialist. Note that with this plan, you can still seek treatment outside the network, but there will be an additional cost.
Health Maintenance Organization (HMO)
HMOs offer a wide range of healthcare services through a specific, local network of participating healthcare providers, hospitals, and facilities. With this plan, you typically must have an in-network primary care physician (PCP). An HMO usually has lower premiums (what you pay monthly out of your check), and you pay less out of pocket than a PPO. But with these lower costs comes less flexibility in choosing providers. Also, this type of plan generally won't cover out-of-network care except in an emergency. This plan is great for those that are okay with a higher deductible in order to save on the monthly payment.
Exclusive Provider Organization (EPO)
EPOs are individual providers or groups of providers who have entered into written agreements with an insurer to provide health care services to members. This plan gives you more freedom to choose your healthcare provider compared to an HMO, and you do not have to get a referral from your primary to see a specialist. With an EPO, however, there is no coverage for out-of-network providers (except in an emergency).
High Deductible Health Plan (HDHP)
An HDHP can vary depending on the specific plan. These plans typically have lower premiums, so they cost less if you need a lot of medical care. The deductible is usually higher than other plans, and you must pay this amount in full before the insurance provider begins to cover any expenses. With an HDHP, you also get access to a health savings account (HSA) to help with out-of-pocket costs.
Point of Service (POS)
A POS plan is a mix between an HMO and PPO. For this type of health plan, you typically need to select a primary care physician that belongs to the plan's network (similar to HMOs) but gives you the flexibility to use out-of-network providers at an additional cost (like PPOs).
Regardless of which health insurance plan type you select, chances are you will incur out-of-pocket costs between deductibles, copays, coinsurance, etc.
As an employer, you can help your employees pay for out-of-pocket medical expenses through tax-advantaged benefit accounts. Medcom Benefit Solutions administers health savings accounts (HSAs), health reimbursement arrangements (HRAs), and flexible spending accounts (FSAs). These accounts provide employees with tax-free benefits while providing the employer with a means to reduce employment expenses.
For information about the health insurance plan options and associated tax-advantaged benefit accounts available to you, reach out to your HR representative or refer to your plan documents.
If you are an employer or broker looking for benefits administration customized for your team, contact us for more info.