In order to make informed benefit decisions, you need to understand each of your options. Some plans will require referrals, a primary care physician (PCP), or include a specific network of providers. Understanding what a plan offers will allow you to use your benefit to its fullest capacity.
Health Maintenance Organization (HMO)
An HMO plan requires a PCP and works within a network of providers. If an individual uses a provider outside of the network, services will most likely not be covered. The PCP coordinates all medical care and must make referrals when specialty care is necessary. Employees may be subject to cost-sharing through deductibles, copays, or coinsurance.
HMOs are typically low-cost but are restrictive due to their PCP, referral, and network requirements.
Preferred Provider Organization (PPO)
A PPO plan has a network of providers. However, the plan allows the utilization of out-of-network providers, albeit for greater cost sharing. Most times, a PCP is not required, but having a PCP may offer additional benefits. Similarly, referrals may not be required either. It is typical for the plan to have coinsurance, deductibles, and copays, which are lower when staying in network.
In comparison to the HMO, the PPO will likely be more costly, but it is also more flexible in its requirements.
High Deductible Health Plan (HDHP)
An HDHP plan often is offered in conjunction with a tax-free account like an HSA to pay for medical expenses. After the deductible is met, the coinsurance in an HDHP is minimal. Typically, the deductibles are higher than other plans but for this reason, premiums are lower. Additionally, a PCP and referrals may be required depending on the plan type. It is important to note, HDHPs do not require a network, but using one could offer additional savings.
A POS plan is a hybrid of the HMO and PPO plans. Like an HMO, choosing a PCP is required, along with obtaining a referral when in need of a specialist. Like a PPO, coverage is still provided when using a provider out-of-network, but at a higher cost. Deductibles and minimal coinsurance or copays are common and notably lower when using in-network providers.
Understanding your options can ensure the best coverage for you and your family. It is important to reflect on your evolving healthcare needs each year to determine which plan is the best fit.