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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. Click here 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 provider unit.

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 of benefits.

Indemnity Plans
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.


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