If you have been shopping for a health plan for your business recently you probably have become familiar with the terms HMO, POS, PPO & EPO. While these terms seem innocent enough, they are very important factors in determining your plans scope of coverage's and how your employees will access their healthcare providers. Listed below are some brief descriptions of these plan types:
HMO Coverage - Under an HMO contract, members are provided services only by physicians and other providers employed or approved by the HMO. Except in an emergency, members are fully responsible for paying for all charges when they seek care outside the network.
Point-of-Service (POS) - The POS plan provides the same services as the HMO plan. It provides more flexibility because it permits you to seek treatment from providers included in your plan's network or to seek treatment outside their service network. If you seek coverage outside the network you will be sharing the cost of care with the carrier, usually through deductibles and co-insurances.
Preferred Provider Organization (PPO) - A PPO is a contractual agreement between providers of healthcare i.e. physicians, hospitals, and insurance carrier or a third party administrator. To encourage patients to use the preferred providers (network), there is full payment of covered services or reduced deductibles and co-payments. Patients are free to use a non-PPO provider if they are willing to pay higher out-of-pocket costs.
Exclusive Provider Organization (EPO) - An EPO plan has the identical contractual agreement of a PPO plan however; an EPO does not offer coverage out-of-network.
The plan design you select has a big effect on the premiums charged for each plan. A PPO plan quite often is 30% - 40% higher than an HMO plan design. Most carriers that offer plans to Long Island businesses offer all of these plan designs in some fashion. Although, POS plans that drop the requirement of a PCP referral to see a plan specialist are often incorrectly called PPO plans when they really are modified POS plans.
Remember that a Licensed Insurance broker can help your business stay on top of these different plan designs. He/She can help you select a plan that is affordable for your business and offers quality healthcare for all your employees. Brokers are compensated by carrier for their services provided to your business.