Group Medical Insurance Plans
For the uninitiated, it seems like alphabet soup. Even for the
experienced human resources specialist, the benefits of one plan over
another might not be well understood. We're here to help you realize the
best value for your health insurance investment.
for a matrix of the information below.
Health Maintenance Organization (HMO)
For an HMO member, a Primary Care Physician
(PCP) provides or authorizes the employee’s health care, except in
cases of emergency. The employee pays a small co-payment for office
visits, and needs only show their health plan’s ID card to obtain
services. All referrals to a specialist must be arranged by the employee’s
PCP, who will usually select and refer them to a specialist in the PCP's
Point of Service (POS)
The Point of Service (POS) plan provides
members with greater choice while still offering the employer the cost
savings of a managed care plan. Members receive the same benefits as the
HMO product but also have the opportunity to receive care out of the
network from a non-participating provider, or from a participating
provider without an authorized PCP referral. POS plans also allow the
employer to cover a limited number of employees and their dependents who
reside outside the network service area.
Employees choose between two levels of care: Authorized Level of
Benefits - A Primary Care Physician (PCP) from the health plan’s
network either provides or authorizes the employee’s care. The health
plan covers all of the physician's services and authorized care, and the
employee pays only a small co-payment for office visits and emergency
services. Unauthorized Level of Benefits — If the employee
chooses to receive care from a PCP outside the network or go directly to
a specialist, he or she must meet a yearly deductible, and is then
covered for a percentage of the usual and customary medical costs. Once
the out-of pocket maximum is reached, services covered by the health
plan are covered 100%.
Preferred Provider Organization (PPO)
The Preferred Provider Organization plan is
similar to the POS product in that it offers in-network services at a
small co-pay and allows employees to access care from non-contracted
providers (with deductibles and co-insurance). The PPO does not,
however, utilize a PCP to manage member care and members do not need
referrals to see specialists. As with the POS product, the PPO product
allows an employer to cover a limited number of employees and their
dependents that reside outside network service area.
A Primary Care Physician is not required for members in the PPO. Members
choose between to levels of coverage: within the health plan network, or
outside the health plan network. By receiving care within the network,
employees receive comprehensive coverage at the in-network level of
benefits, typically subject to a small co-payment. By receiving care
outside the network, employees are covered at the out-of-network level
Now used rather infrequently, indemnity
plans were the traditional model for all health insurance for many
years. An indemnity plan requires the employee submit bills with a claim
form after receiving health care services. The insurance company reviews
the claim form and reimburses the employee for a substantial portion of
covered benefits in excess of the plan’s deductible.
Return to the
general discussion of Employee Benefits.